Former chief economic adviser Arvind Subramanian on Wednesday said India must shed its protectionist attitude and become an exporting economy.
“Unless India’s exports grow at 15 per cent, we won't get 8 per cent growth. For that, we should reverse some of the protectionist measures taken. If we turn protectionist, I don't know how can we be an exporting power. Self-sufficient exporting powerhouse is an oxymoron,” he said.
Addressing a webinar organised by EY India, Subramanian said while labour reforms were necessary, the way they have been done by some states have undermined basic protections to workers. “It is going to be a very very difficult economic year. We should brace ourselves for a sharp decline in GDP growth. We should also brace ourselves for the fact that India's deficit almost certainly will be double digit. India’s fiscal situation is going to be very, very difficult,” he said.
Subramanian said reviving the financial sector is going to be critical for stimulating economic growth.
Talking about India’s current macroeconomic situation amid the Covid-19 pandemic, he said the Fiscal Responsibility and Budget Management (FRBM) Act and terms of reference of the 15th Finance Commission will probably have to be revised and updated.