September 26, 2023

“Economic statesmanship lies in balancing growth, equity and price stability”, observed Dr C Rangarajan, former Chairman of the Economic Advisory Council to the Prime Minister and former Governor of the Reserve Bank of India.

He was speaking at the launch of an e-compendium containing articles on “Growth, Fiscal Policy, and Monetary Policy of India: Why and How to Overcome Economic Shocks?”, authored by him and Dr D K Srivastava, Chief Policy Advisor, Ernst & Young India and former Director, Madras School of Economics.

This e-compendium is a treasure trove of articles that offer deep insights into the economic challenges faced during these trying times. It is published by CUTS International, a leading global public policy think- and action-tank on trade, regulation and governance.

It serves as a testament to the resilience and adaptability of the Indian economy and its policymakers during an unprecedented crisis. It offers valuable perspectives and lessons learned that will shape economic policy discourse in India and the world at large for years to come.

Welcoming Dr Rangarajan, Dr Srivastava and other participations, Pradeep Mehta, Secretary General, CUTS International, commended the profound insights of Dr Rangarajan on both microeconomic and macroeconomic issues. He underlined the guidance and mentorship that Dr Rangarajan had provided CUTS and its affiliated institutions over the years.

Mehta stated that the compendium contains a valuable collection of articles on economic policy, which would be easy to access and understand.

This collection, carefully put together to help both policymakers and the public, explores many complex challenges that have affected the world economy, particularly during the COVID-19 pandemic and the Russia-Ukraine conflict.

In his address, Dr Rangarajan highlighted the unique nature of the COVID-19 crisis, highlighting it as the first non-economic threat to have triggered such significant economic repercussions in the last century. He explained distinct phases of the pandemic, where the initial period witnessed a disproportionate impact on the economy compared to the human tragedy, while the later stages saw a reversal of this scenario.
Dr Rangarajan emphasised that a multi-dimensional development strategy is essential, underscoring that reforms alone do not guarantee economic growth.

“Economic growth is the answer to many of our social and economic problems,” he said and added that “it cannot be sustained for a long time unless equity is also accounted for.”

He also stressed on the need for cultivating a conducive climate for investment by addressing both economic and non-economic factors. “Strong exports and robust manufacturing growth are pivotal in increasing output and generating employment.”

Dr D K Srivastava brought attention to the formidable challenges faced by policymakers, not only during the COVID-19 crisis but also due to subsequent supply chain disruptions caused by the Russia-Ukraine conflict. He noted that the COVID-19 year marked the most substantial contraction in the Indian economy since 1999, with GDP plummeted by -5.8%. This economic turmoil was further compounded by the disruption in global trade and supply chains.

He pointed out that while the economy contracted and policymakers faced with a dilemma, they pursued fiscal and monetary measures to stimulate growth, displaying a commitment to responsible economic management. “The titles of many of our articles in the compendium capture policymakers’ dilemma during the COVID period.”

In his closing remarks, Bipul Chattopadhyay, Executive Director, CUTS International, thanked Dr Rangarajan and Dr Srivastava for their insights on economic policymaking. He underlined the importance placed by Dr Rangarajan on growth. “Now, the challenge now is how to make growth more human-centric. Our future discourse on economic policymaking needs to focus on it.”

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