Topmost policy think-tank of the countrySKOCH Grouptoday organizedSKOCH 61stSummiton theState of GovernanceandIndia’s dash to $5 Trillion Economy.
Speaking about Human Resource and New India,Mr. Ramesh Pokhriyal, Hon’ble Minister for Human Resource Development, Government of Indiasaid,”I thank SKOCH for bestowing this award to me. Mr. Sameer Kochhar has created a platform which analyses the work done and effective results generated by various government and non-government organisations and felicitate the good work done. Education is the way to build the foundation of a capable person. We are one of the largest and complicated schooling education systems of the world. We are on the final stages of making the new policy for this education system. This policy has been developed by taking into account of almost every voice that is associated with education in the country. We have taken inputs from 1,10,000 gram committees and even received more than 2,00,000 suggestions from public. We are fortunate that everyone so far has applauded the new policy and have supported our efforts.”
The highest honour of SKOCH Awards –SKOCH Challenger Awardwas conferred toMr. Ramesh Pokhriyalfor his valuable contribution ine-governanceand for the betterment of education in the country. This is the first time that the award is being given to a Central Government Minister.
Speaking about the ‘State of Public Finance’ Dr. Rathin Roy, Part-time Member, Economic Advisory Council to the Prime Minister of India & Director, NIPFPsaid, “The fiscal challenge that the country is facing is not recent, it has been stretching for past few years. Some progress has been made in the recent times but that is not enough to give government the fiscal space they require. The Central government has shrunk in size in respect to the Total Government Spent, compared to 20% in 1991 to 13% of the GDP in 2019, it has shrunk by 7% of the GDP. While at the same time the fiscal commitments of the government have increased from core commitments like Railways and Roads to more expanded programme that includes spent on Health and Welfare schemes. This is the heart of the fiscal problem we are facing. This is a long term problem and cannot be fixed immediately.”
Talking about the solution to the huge fiscal challenge that the country faces and the steps being taken by the government to fix it, he said “To tackle this long term issue governments try to find fiscal space. There are three ways in which governments try to make fiscal space. First, try and make sure that they do not share fiscal with states, the structural window for this is to impose CESS. Second, rely on non-tax revenues such as dividends, etc. And third, disinvestment receipts. Governments often are reluctant towards disinvestment as no one wants to let go off assets unless they are looking to acquire another assent in its place. This government’s efforts in meeting with the fiscal deficit by foregoing revenue through tax cut id a better strategy than it is being credited for. There needs to be a national debate to discuss which steps of the government are right and which are not. But it becomes impossible to have the debate due to the defensiveness that comes from various sides and the intrusive ignorance of the social media.”
Power panels of eminent people from ministries and outside the government framework, deliberated and analysed the current state of governance in India and the role political as well as bureaucratic systems and leaders instrumental in bringing this transformation. After the exchange of various voices and opinions key take-aways came out:
- Indian bureaucracy approach needs to transform for better solution and problem solving. System’s approach of addressing the urgent over important needs to change. Increased accountability at all levels specially the grass-root level
- System learning needs to be improved by better reporting and outcome analysis
- Restructuring of the financial transfer structure enabled by technology is required for minimising leaks in the system. The country is moving away from ‘out of one rupee only 15 paisa reaches the beneficiary’ scenario but still a lot of ground needs to be covered
- If we want to solve the problem of leakages in the fiscal system we need better Public Expenditure Management
- System needs to respond better to the needs of marginalised people. Targets need to be fixed in terms of indicators and not financial inputs
- Governmental reforms – moving from demand side governance than supply side governance. Designing schemes keeping the implementation capacity for effective delivery
- Tax cut will not yield benefits in the short-term, they are a more mid-term and long-term solution
- Lack of Center government – State government synergies and political interventions delay the benefits to reach beneficiaries and hampers implementation of potentially effective policies
Panel applauded the improved achievement of governments and systems to serve the correct beneficiaries in the recent years.
Addressingthe possibility of$5 Trillion Economytransformation,Mr. Sameer Kochhar, Chairman, SKOCH Group(India’s topmost development think-tank) at the event said, ”5 Trillion is not just a target for the Indian economy, it has a more significant implication. If we don’t achieve 5 Trillion economy goal we would not be able to banish poverty from the country. No doubt, it is a difficult target to achieve but an attainable one. Facts show that this target is achievable and facts cannot be dismissed. The welcomed tax reduction move by the Honourable Finance Minister is just the beginning of this transformation. With a few more constructive steps we can rapidly progress towards aim that the government has set. Another major step that is required to kick start the economy and put it on the road to transformation is the transmission of reduced interest rates by the banks. Till very recently we had one of the highest rates of interest and income tax, but now corrections have been made in this respect. Though a move in the right direction, due to the tax rate deductions the government is expected to take a loss of approximately 1.75 Lakh Crore. How is this huge gap going to be covered? The answer lies in acceleration of disinvestment in the public sector.”
Mr. Kochharadded, “As we know the Incremental Capital Output Ratio (ICOR) is inversely proportional to growth of the economy. Major steps need to be taken to reduce it from the current ratio of 6. The country needs to achieve more output in less capital. Capital expenditure on the government is a huge cost to the country and there is a lot of scope to reduce it. Many projects in the country have successfully set an example for other by reducing cost still completing projects effectively and efficiently.”
Eminent personalities such as,Mr. Dharam Pal, Additional Secretary, Department of Fertilizers, Ministry of Chemicals & Fertilizers; Mr Vivek Aggarwal, Joint Secretary (Crops & IT) & CEO-PM KISAN, Dept of Agriculture, Co-Operation & Farmers Welfare; Mr Gopal Krishna Agarwal, National Spokesperson – Economic Affairs, Bharatiya Janata Party,among others participated in the summit.