Indian economy needs big fiscal injection: Kaushik Basu

Emphasizing the importance of the upcoming Indian budget, Former World Bank Economist Kaushik Basu tweeted on Monday that India's growth was less than the previous year, every year since 2016. This is the first time the Indian economy has witnessed a 5-year downward spiral since independence, added Basu.

Basu, a former Chief Economic Advisor to the country, notes that the Indian economy, now amongst the 20 per cent slowest growing nations in the world, deteriorated progressively since 2016 recording growth of 8.2 in 2016, 7.2 in 2017, 6.1 in 2018, 4.2 in 2019 and -7.2 in 2020.

The criticism comes amidst the Centre's claims of tough economic reforms in the last five years including demonetization, implementation of GST, and farm reforms amongst others.

Basu has also been highly critical of the farm reforms put forth by the Modi government and expressed his disagreements on Twitter as well as in print. Terming them 'flawed' and 'detrimental', Basu condemned the three reforms for serving corporate interests over farmers.

In his tweet, Basu recommended that a big fiscal injection is needed to counter the growing fiscal deficit caused due to fall of tax revenue in the months of Covid-19-induced lockdown. Basu also recommended cuts on non-essential expenditure and direct support for labourers, farmers, and small businesses.