To Compare Sri Lanka’s Economic Crisis With India: Former NITI Aayog Vice-Chairman

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Former Deputy Chairman Niti Aayog Arvind Panagariya on Sunday said he would be ‘silly’ to compare the economic situation of Sri Lanka with India.However, lessons can be learned from the economic crisis in the island country.

Mr. Panagariya, in an interview with PTI, further said that since the 1991 balance of the balance sheet, the government had successfully managed the macroeconomic economy conservatively.

He showed that in the case of India, fiscal deficits have not been permitted to get out of hand, the exchange rate has been permitted to depreciate so that the current deficit remains low, monetary policy has been detained so that inflation remains low, and the opening of financial capital flow has been carried out in a calibrated manner.

This is a silly comparison … Suggestions from every parallel between India and Sri Lanka are currently ridiculous,” Panagariya said, adding that India rarely borrowed abroad to finance fiscal deficits.

The leading economist was asked to comment on the statement of former President Rahul Gandhi where Gandhi attacked the Modi government about the increase in inflation and unemployment and said India looked “very similar to Sri Lanka” and the center should not distract people.

Sri Lanka wrestled with a severe economic crisis, and India was at the forefront in expanding economic assistance to Sri Lanka.

He said, “We must take lessons from Sri Lanka’s experience for our macroeconomic management in the future. That is the main relevance of the events there to India.”

Mr Panagariya, an economic professor at Columbia University, answered questions about unemployment and stated that Indian problems were not unemployment; Conversely, it is a lack of work or low productivity.

We need to work to create work that is paid well for the masses,” he said, adding that the unemployment rate even in the 2020-21 Covid year down to 4.2 percent compared to 6.1 percent in 2017-18.

The leading economist notes that those who have lifted the hue and cry at the 6.1 percent level in 2017-18 have now been completely silent at the unemployment rate reported by the Periodic Labor Force Survey (PLFS).

In the question raised by several experts about Indian official data about various subjects, he said the collection of GDP, PLF, and vital state statistics well in international comparison.

There are some original criticisms that need to be handled. We certainly need to invest more in improving our data collection,” he said.After saying this, Panagariya said, ‘We must also call and reject many criticisms motivated’.