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‘Need to use land, labour & capital more efficiently to boost growth, productivity’

MANGALURU: For a country like India, the largest contribution to growth and productivity will probably come about from more efficiently using land, labour and capital, thus they must be used more efficiently, said Bibek Debroy, chairman of the Economic Advisory Council to the Prime Minister (EAC-PM) at an Assocham event held in New Delhi.

“Our titling systems are pretty pathetic, there are states in India where cadastral surveys are obsolete and unless we update them, unless we have some kind of reasonable titling system it would be extremely difficult to use land efficiently,” said Debroy while addressing the delegates in the valedictory session of a national conference on fiscal policy roadmap organised by The Associated Chambers of Commerce and Industry of India (Assocham) jointly with EGROW Foundation.

He stressed it is compounded by the fact that in some parts of the country land laws are very specific to those states which prevent the mainstreaming.

“On the labour part, let me also flag not just the labour laws but skills, let me also flag, the world participation rates, particularly of women,” he added.

He also stressed on the need to talk, think about, discuss and debate the question of sagging states reorganisation in India. “Quite clearly some states are sub-optimal because the population size is too large and quite clearly some states are sub-optimal because the populations are too low.”

“We have come to a cusp where we need to debate the present package of Central Sector and Centrally Sponsored Schemes,” he added.

Just as the union government should contribute towards health, even though it happens to be in the state list, by the same token, the state government should also contribute for their share in defence, national highways, railways etc, he advocated.

“While fiscal consolidation is important, we must also prioritise and decide that these are the areas that are important from the point of view of public expenditure and we should not expect the government to be doing anything more,” said Debroy.

He also brought into focus need for complete elimination of exemptions for a simplified and rational tax system evoking an excellent response from the audience.

Vineet Agarwal, vice-president ASSOCHAM said, the fiscal policy roadmap is an issue which has a huge bearing our economy. After all, it is a question of large expenditure by the government , both at the Centre and state levels and this expenditure affects us the most, both in a positive and if not managed well, in not so positive manner as well.

The bottom line, therefore, lies in the financial discipline and it is true both for the governments and the industry. Any mismatch can be costly for the economy, as we have seen in the last few years how some of the over-leveraged firms are battling it out, while the onus of the investment was being largely on the government, said Agarwal.

S C Aggarwal, senior member, ASSOCHAM said the difference between the fiscal deficit figure of 3.4 per cent and 3.5 per cent may look negligible, but can make a huge difference about the perception of an economy, amongst the financial market intermediaries – whether they are domestic investors, FPIs, rating agencies or the overnight money market players.

News credit : Indiatimes