finance secretary tv Somanathan Has been in the hot seat, working on the government’s reform road map during the COVID-19 pandemic. In an interview, he told TOI that now there is a need to focus on improving the quality of spending especially on health and education. Part:
There is criticism that some reforms introduced in recent years have been carried forward without consensus and are not inclusive. Is this a fair assessment?
Sometimes improvements have to be made quickly. That’s not to say that counseling shouldn’t be done, but developing a consensus may not always be practically possible while you’re trying to rush it. So, 1991 is an excellent case where the government needed to do certain things and they proved to be beneficial.
If you look at many of the reforms that have been announced recently, they have been widely discussed before, with consultations in some cases going for more than a decade. It is a question of consensus versus consultation. It is not possible that there is complete agreement on all the reforms.
Ultimately the governments have to take decisions based on their assessment of the overall welfare of the country. The government is following the path of consultation.
Is it more difficult to improve now, given that some earlier ones may have been low-hanging fruit?
Many of the 1991 reforms were difficult and they were brave. The nature of the reforms has changed as many reforms today are not stroke-of-the-pain improvements. They cannot be done by passing orders.
For example, it involves a process to improve the quality of education or sanitation in public healthcare or schools and may not be instantaneous. Most reforms now require execution over time with multiple actors spread across the country – from local government to states and Center. This makes it more difficult.
One of the challenges is to get the states on board and then reform, for which various tools are being tried.
Why is it that only one crisis triggers major change, be it in 1991 or the recent IBC?
There are some things that are critical to responding to the crisis, such as the 1991 reforms, which were in response to an acute shortage of foreign exchange. what was done in the last year Aatmanirbhar There was no correlation between the package, farm or labor reforms and today’s crisis.
The crisis was an opportunity and the government looked at everything it could do to restore growth. But growth was not halted by those things, but by the pandemic. The government is deliberately trying to push reforms and not as a knee-jerk reaction to a particular incident.
What will be the major thrust areas in the next five years?
India is not a country that can deliver a huge fiscal push for growth. The biggest challenge will be to improve the outcome of our expenditure at the central and state level. Our fiscal expenditure is substantial, quality needs improvement.
We need to divert education expenditure to quality rather than buildings or teachers. At a large scale, we have sufficient numbers. is it an exercise or is it to re-orient Budget for both health and education.
What about subsidies?
Subsidy reform is a big challenge for us but it is a matter on which we need political consensus. I will try to emphasize those things which require administrative decision.
States are autonomous, how do you balance it with some of the national goals that we tried last year. We impose certain conditions on a small part of the loan. It allows states to opt in. It’s a push, which has helped.
There is criticism that some reforms introduced in recent years have been carried forward without consensus and are not inclusive. Is this a fair assessment?
Sometimes improvements have to be made quickly. That’s not to say that counseling shouldn’t be done, but developing a consensus may not always be practically possible while you’re trying to rush it. So, 1991 is an excellent case where the government needed to do certain things and they proved to be beneficial.
If you look at many of the reforms that have been announced recently, they have been widely discussed before, with consultations in some cases going for more than a decade. It is a question of consensus versus consultation. It is not possible that there is complete agreement on all the reforms.
Ultimately the governments have to take decisions based on their assessment of the overall welfare of the country. The government is following the path of consultation.
Is it more difficult to improve now, given that some earlier ones may have been low-hanging fruit?
Many of the 1991 reforms were difficult and they were brave. The nature of the reforms has changed as many reforms today are not stroke-of-the-pain improvements. They cannot be done by passing orders.
For example, it involves a process to improve the quality of education or sanitation in public healthcare or schools and may not be instantaneous. Most reforms now require execution over time with multiple actors spread across the country – from local government to states and Center. This makes it more difficult.
One of the challenges is to get the states on board and then reform, for which various tools are being tried.
Why is it that only one crisis triggers major change, be it in 1991 or the recent IBC?
There are some things that are critical to responding to the crisis, such as the 1991 reforms, which were in response to an acute shortage of foreign exchange. what was done in the last year Aatmanirbhar There was no correlation between the package, farm or labor reforms and today’s crisis.
The crisis was an opportunity and the government looked at everything it could do to restore growth. But growth was not halted by those things, but by the pandemic. The government is deliberately trying to push reforms and not as a knee-jerk reaction to a particular incident.
What will be the major thrust areas in the next five years?
India is not a country that can deliver a huge fiscal push for growth. The biggest challenge will be to improve the outcome of our expenditure at the central and state level. Our fiscal expenditure is substantial, quality needs improvement.
We need to divert education expenditure to quality rather than buildings or teachers. At a large scale, we have sufficient numbers. is it an exercise or is it to re-orient Budget for both health and education.
What about subsidies?
Subsidy reform is a big challenge for us but it is a matter on which we need political consensus. I will try to emphasize those things which require administrative decision.
States are autonomous, how do you balance it with some of the national goals that we tried last year. We impose certain conditions on a small part of the loan. It allows states to opt in. It’s a push, which has helped.
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