Lagatar24 Desk
New Delhi, July 31: Arvind Panagariya, a former vice-chairman of NITI Aayog, stated on Sunday that it would be ‘silly’ to compare Sri Lanka’s economic status to India’s.
However, the island nation’s economic predicament offers some lessons.
In a PTI interview, Panagariya added that since the 1991 balance of payments crisis, succeeding governments have prudently managed the macroeconomy.
He noted that in the case of India, fiscal deficits had been kept in check, the current account deficit had been kept in check by allowing the value of the rupee to decline, inflation had been kept under control, and the opening up of financial capital flows had been done so in a calculated way.
“This is a silly comparison…suggestions of any parallels between India and Sri Lanka currently are laughable,” Panagariya said.
“India has rarely borrowed abroad to finance its fiscal deficit,” he added.
“We must surely take lessons from the Sri Lankan experience for our future macroeconomic management. That is the main relevance of the events there for India,” he further added.
In response to a query about unemployment, Panagariya, a professor of economics at Columbia University, stated that the issue facing India is underemployment or low-productivity employment rather than unemployment.
“We need to work on creating well-paid jobs for the masses. The unemployment rate even in the Covid year of 2020-21 had been down to 4.2 per cent compared with 6.1 per cent in 2017-18,” he said.
