Former Chairman of the Economic Advisory Council to the Prime Minister and former Governor of Reserve Bank of India C. Rangarajan has underscored the need for India to continue with the reform agenda.

In doing so, policymakers should identify sectors requiring reforms in terms of creating a competitive environment and improving performance efficiency. Also, the Centre and States must be joint partners in this effort, he said, delivering the first B.P.R.Vithal Memorial Lecture at the Centre for Economic and Social Studies (CESS) here on Wednesday.

Mr. Rangarajan, who is Chairman of the Madras School of Economics, said the reform agenda ought to be incremental in character. “We need to move in the same direction in which we have been moving in the past three decades,” he said.

Noting reforms do attract criticism, he said power sector, the financial system, governance and even agricultural marketing need reforms. “We need a lot more of discussion and consensus building. Timing and sequencing are also critically important. For example, labour reforms are best introduced when the economy is on the upswing. Looking at recent controversies over agricultural marketing reforms, the best course of action now may have been to leave these measures to each State to decide whether they want these changes or not. That will set the stage for experimental economics and farmers themselves will be able to see the best possible solution for different agricultural crops and conditions,” he said.

Mr. Rangarajan said for India to become a $5 trillion economy, from $2.7 trillion, the country needs to grow at 9% per annum for at least five consecutive years.

Pointing out that the growth story cannot be complete without reference to COVID-19 and the Russia – Ukraine War, he said the economic impact of the former was largely because of the actions taken to contain the spread such as lockdown.

“2022-23 will be the first normal year after COVID-19. Even that assumption has been shattered by the Russian invasion of Ukraine. The economic impact of this war can be severe, if it continues for long. The expectation that the growth rate in 2022-23 could be around 8% was optimistic even before the war. Perhaps, we should settle for a growth rate of 7%. All this is a guess at this point. A clear picture will emerge only after a few weeks,” Mr. Rangarajan said.

He said the late Vithal was an outstanding economic administrator and held the position of Planning – Finance Secretary of Andhra Pradesh for a record 13 years. CESS Chairman Dilip M. Nachane chaired the lecture programme.