NDA Government No Different In Tackling Economic Crisis: Analysts

Monday, 30 June 2014, 07:33 Hrs
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NEW DELHI: The new NDA government has given no indication it is better equipped than its UPA predecessor in tackling the myriad crises affecting India's economy, according to a group of policy analysts who discussed here the challenges before the dispensation ahead of the union budget on July 10.

"The belief system that characterized UPA 1 and 2 is also the same as the NDA's and that is quite inappropriate for tackling the multiple crises of the Indian economy", said Deepak Nayyar, emeritus professor of economics at New Delhi's Jawaharlal Nehru University.

The answers to the crises, characterized by slowing growth, persistent inflation and the current account deficit, do not lie in reducing the fiscal deficit and raising interest rates like was done by the previous government, Nayyar said at a roundtable on challenges before the NDA organized Saturday by a group of NGO think-tanks at the India International Centre.

Pointing out that there is nothing in macro-economic theory that says the fiscal deficit is not sustainable provided government borrowing is used for investment, Nayyar, a former president of the Indian Economic Association, said : "That raising interest rates will contract inflation is false both in theory and practice. It's time to rethink macro-economic policies by redefining policy objectives or reconsidering policy issues."

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Source: IANS
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