Former Reserve Bank of India (RBI) Governor Urjit Patel in an article pointed out that India is not testing enough and that may cause trouble for the decisions that the government has to take in the coming weeks.
"For the size of our population, the quantum of tests we have conducted so far seems to be too few," he wrote in an article for The Indian Express. He further pressed for the government to bear the entire cost of testing, arguing that without requisite data, we would venture blindly in taking decisions here on.
He went on to enumerate the benefits of credible data, saying that it would “infuse confidence in both the health and economic sphere”, while without such data, there would be uncertainty and a slowdown of economic recovery.
However, giving credit where it’s due, Patel termed the policy rollout in the past couple of weeks as ‘sensible’. Backing the government's economic relief package rolled out last month; he wrote that the support for the most vulnerable, in terms of both food and money, has “combined compassion and prudence”.
The government had come under criticism for not spending enough in terms of ensuring food security for the poor. Patel provided a rationale in the Centre's favour. He explained that with the exception of China, no developing country could match the relief strategies announced by developed nations like the US, UK and Germany.
“Countries that can issue reserve currencies have much more elbow room. EMEs, like India, obviously don’t have this luxury. For India to replicate what developed countries have done is not possible as willy-nilly we have to confront the reality of limited financial space,” he wrote.
The former RBI governor also stated that India’s correctly measured national fiscal deficit is perpetually high, and it is about to get larger even without an increase in outlays. "First, revenues will decline sharply; and, secondly, state governments who are the first responders of the health emergency will be hard pressed," he noted. (Courtesy: News18.com)
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