A US-based Indian economist has said the new Indian government has made a good start on the economy front in the first 30 days even as it has a long way to go. "On balance, the government has made a good start with many, not all, positive steps taken (grades of A– or higher).
“Any assessment should take into account difficult circumstances, especially a disappointing monsoon that threatens to reduce agricultural output and fuel already high inflation," noted economist Arvind Subramanian said giving his score card of first 30 days of the Narendra Modi government.
Prime Minister Modi took over power in mid-May with high expectations that it would strengthen India's fragile macro economy and faltering investment and growth.
"An assessment this early is a little unfair.
“Additional major policy announcements will be made in the budget on July 10. But to its credit, the government has not been idle or inactive," he noted.
Subramanian currently is the Dennis Weatherstone Senior Fellow at the Peterson Institute for International Economics and a Senior Fellow at the Center for Global Development.
The moderate increase in minimum support prices for rice and pulses is a positive step, he said, as he gave A Grade to the government in this category along with on two other issues encouraging States to liberalise movement of fruits and vegetables and roll back labour laws.
Giving A- for the increase in railway fair, Subramanian said the increase in tariffs is substantially less than necessary to fill the hole in the railway budget.
Giving B for imposing minimum export price for vegetable, the economist said ideally, more basic reforms are needed, but given the magnitude of the potential threat from inflation this is not an unreasonable measure.
On extending forbearance on nonperforming loans of corporate sector, he gave B- to the new government.
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