Fiscal prudence need of the hour, says Rangarajan
ICFAI Foundation for Higher Education (IFHE), the Deemed University of ICFAI, organised the sixth N J Yasaswy Memorial Lecture at its campus here on Thursday.
Hyderabad: ICFAI Foundation for Higher Education (IFHE), the Deemed University of ICFAI, organised the sixth N J Yasaswy Memorial Lecture at its campus here on Thursday.
Dr. Rathin Roy, the Director and CEO of the National Institute of Public Finance and Policy, was the Chief Guest for the event. The event was presided over by Dr. C Rangarajan, the Chancellor, IFHE, who is the former RBI Governor and former Governor of undivided Andhra Pradesh.
In his address, Dr. Roy spoke on “The Need to Persist with Fiscal Consolidation”. He emphasised the need for fiscal prudence on the government’s part, in various fiscal decisions like borrowing, and spending, and managing the fiscal targets.
He drew an interesting analogy between alcoholism and the tendency to borrow in the name of public expenditure, which could result in deviation from the fiscal targets. Dr .Roy shared his views on the significance of a sound fiscal policy and appropriate fiscal decisions towards macroeconomic stabilisation.
He also shared his views on the Fiscal Responsibility and Budget Management (FRBM) Act 2003, and its significance in reducing India’s fiscal deficit. Dr. Roy stressed on the need to act with judiciousness in fiscal policy making and implementation.
Dr. Rangarajan emphasised the need for prudence in fiscal spending and pointed out that most of the government’s funds, in the name of public expenditure, were spent towards the revenue expenditure instead of capital expenditure. This, according to him was not a wise move, as it led to larger fiscal deficit with proportionally lesser public good.
Dr. Rangarajan said, “Sometimes History offers very important lessons to learn” referring to the 1991 and the 2008 financial crises, which were largely due to the laxity in fiscal prudence.
On the occasion, Dr. Roy released a book titled “Tracking the Indian Economy: A Collection of Articles” authored by Dr. Rangarajan, and published by IUP Publications, a division of the ICFAI Society.
Speaking about the book, Dr. Reddy said, “This collection of articles will be of immense help to students, PhD scholars and faculty members in economics and business in India and abroad to get an insight on the performance of Indian economy.”