Kaushik Basu, former chief economist of the World Bank and former chief economic adviser to the Indian government, said lack of jobs is a concern but more concerning is that India does not have appropriate data and tools to measure the sector. Basu, who was in the city to deliver a lecture on ‘The Story of India’s Economy: Yesterday, Today and Tomorrow’, also touched upon other concerning areas for the country. In an interview to Free Press Journal’s Jescilia Karayamparambil, he spoke about the employment sector and farm loan waivers.
One of the largest employers, the government, themselves are not filling up the vacant posts. How do you see that impact the country?
Job situation in India is worrying. But in the case of government job data, I don’t have any data there to share.
The agriculture sector and farmers have become the Holy Grail when elections come closer. How do you see it?
This is the cost of democracy which happens in democratic countries that parties give disproportionate benefits when elections come closer. The opposition also promises disproportionate benefits too. This is a part of democracy but we have to relatively enlighten ourselves on that. Little bit of this happens in all democracy but in that process you have to be careful that you don’t do a long-run damage.
On the farming sector what I have seen is not really worrying. But it can be worrying if this game hots up. It can be worrying in the long-run but in the short term it might give some hype.
How do you see farm loan waivers in this situation?
Giving a general view, it is better to very rarely give loan waivers. People must learn that when they take loan, it is their responsibility to repay it. It is not that you should never give a loan waiver. After all, in rich countries there are bankruptcy laws for the same. They show in their books and say they did everything right but still they went bankrupt. There the law gives them a waiver. The way these kinds of things should be done, is that it should not be in the hands of the politicians. The politicians should not be allowed to take a decision on these things but the regulation or bankruptcy laws that would be well done. Law recognises that any person in a bad situation needs a loan waiver but limited and occasional amount. So that people will not depend on loan waivers and take huge amounts of money.
India, at present, is focussing on infrastructure-led development. Is any other model that the country should also focus on?
The infrastructure-led development is important and I think it is in the right direction. But there is one thing that has to be kept in mind, India’s overall investment including infrastructure investments and other kinds of investments — together as a fraction of GDP is falling over the last five-six years.
You cannot let that figure go down too much, no one watches it. Leaders don’t usually pay much attention to that.
But as an economist, I know that the investment to GDP ratio has an effect on growth in the long run. So you need to keep a tab on that.