India can become a $10 tn economy, ex-finance secy Subhash Chandra Garg explains

Former Finance Secretary and a seasoned bureaucrat, Subhash Chandra Garg has channeled his 36 years of experience as a policymaker in his first book, which is interestingly titled, The $10 Trillion Dream. Garg, who held some crucial policymaking positions in his career as a bureaucrat, in his debut as an author takes a comprehensive look at the evolution of India’s macroeconomic policy, and from that vantage point, goes on to divide the policies between what has been done, and, in light of the uncertain future, what needs to be done, urgently. In short, from the very beginning, it sets the agenda and walks the reader through the challenges that needs to be overcome in order for India to reach the $10 trillion target by 2035.

Talking about the policy reforms, Garg tells Business Today: “If you want a real goal to be set, you should have time to change the fundamental structure of the economy, the fundamental drivers of growth in the economy, and also the policy has to be a little longer timeframe. And that's the reason I think we should talk about the policy reforms.”

According to Garg, it is imperative to take a longer-term view, with respect to the economy.

“But if you really want to take a longer-term view, then you will have to set the big policy agenda and $10 trillion would then become a meaningful milestone. And only by doing so, by 2047, you should then be talking about $25 trillion economy and set the policies for that. So, I think it makes sense to look at long term and then set goals in the policies for that,” he added.

Garg is of the opinion that there is a need to take some crucial policymaking decisions if we want to achieve these targets. He added that firstly the government's role in the economy needs to be completely recast, and that would require the government to get out of the business altogether.

“So, the first big reform is to get the government out of the business, the government should sell off most of the public sector entities. There are a couple of them, I said in the book they are about 25 of them, like the NTPC, Power grids, the Indian Oil Corporations, BPCL, etc.  For that matter these can be put together into one sovereign asset management and given into the hands of professional managers,” Garg said.

According to him, the second big reform that the government should focus itself on should be what we call public goods and services. As Garg argues, the role of the government is to provide defense needs, it is to provide security to the nation, and to have an overall macroeconomic management, control inflation, and so on. So, Garg argues, government needs to get of places it has no place to be in, save the resources, and invest in that. Hence, Garg emphasises on how crucial the government’s role is in the public goods and services segment.

Talking about the third big reform that needs to be undertaken, Garg argues that another big responsibility of the state is to take care of the environment and to recast the redistribution programs which we have in the country. We have so many programs, ranging from agricultural subsidies to jobs-related payments schemes, to subsidies and schemes on food, to fertilizer, etc. But, Garg says, none of them are very well targeted. Garg, in his book, lays out a comprehensive plan that the government needs to undertake in order to achieve not only its targets, but to reach the golden goal of a $10 trillion economy in the decades to come.