India has had V-shape recovery due to unprecedented reforms: Chief Economic Adviser

In an interview with Rajdeep Sardesai, Chief Economic Adviser Krishnamurthy Subramanian claimed India's economy has had a V-shape recovery and credited the Modi government's unprecedented reforms for that.

In an interview with India Today TV Consulting Editor Rajdeep Sardesai, Chief Economic Adviser Krishnamurthy Subramanian claimed India's economy has had a V-shape recovery and credited the Modi government's unprecedented reforms for that. Excerpts:Q: A day before Diwali and a day after bypolls, the government cut fuel prices. Is it political convenience? What does that say about our policymaking?The increase in prices was because of the increase in crude oil prices across the globe.Q: But prices were higher than our neighbouring countries.India is the fifth-largest economy and I always look at advanced economies as a benchmark because that's where we want to head.Q: Is there a growing sense of inequality between those who have benefited hugely and those who have not?We can continue focusing on the empty portion of the glass. It was okay to do so last year during the pandemic, but now we have to get over this. The economy has recovered significantly as I had predicted last year. Let's focus on the good news as well. You will never have uniform growth across all sectors. The price cut will provide relief for the middle class.Q: GST collections are up, manufacturing numbers are good, but we also get reports from MSMEs that they're struggling.Not only manufacturing, the service sector PMI is at a 10-year high. That's primarily because of the 1 billion vaccine doses. This is important because a lot of small firms rely on services. Manufacturing growth also benefits smaller firms because they're part of the supply chain. We also need to see credits given to small firms.Q: MSMEs say there's a big gap between policy-making and policy implementation.Formal sector firms use both capital and labour and the impact on them is greater. But thankfully, that's not happened in India. The informal sector relies primarily on labour. Let's not pretend that there was no pandemic. Economics is always about benchmarking. Tourism has come back very healthy.Q: You still maintain it's a V-shape recovery.It's not me saying. When I said it, there was no data. It was a judgment call based on my courage and conviction. Now the data speaks for itself.Q: When do you see the economy at the pre-Covid level?Which economist worth his salt will deny that our unprecedented reforms will enhance productivity and investment? That there hasn't been a recovery? The data, even from outside India, is very clear: there's been a very robust recovery. India has had the sharpest recovery. If this is not a V-shaped recovery, then what is?Q: What's the biggest positive? And the biggest concern?The biggest positive is the robust recovery. We will take longer to catch up simply because our growth rates were much higher.