Hyderabad: ICFAI Foundation for Higher Education (IFHE), Deemed University of ICFAI at Hyderabad organised 6th N J Yasaswy Memorial Lecture. Dr. Rathin Roy, Director and CEO of the National Institute of Public Finance and Policy who was the chief guest spoke on ‘The Need to Persist with Fiscal Consolidation’.
He emphasised the need for fiscal prudence on the government’s part, in various fiscal decisions like borrowing, and spending, and managing the fiscal targets. Dr Roy drew an interesting analogy between alcoholism and the tendency to borrow in the name of public expenditure, which could result in deviation from the fiscal targets.
He shared his views on the significance of a sound fiscal policy and appropriate fiscal decisions towards macroeconomic stabilization. He also shared his views on the Fiscal Responsibility and Budget Management (FRBM) Act 2003, and its significance in reducing India’s fiscal deficit. Dr C Rangarajan, Chancellor, IFHE emphasised the need for prudence in fiscal spending and pointed out that most of the government’s funds, in the name of public expenditure, were spent towards the revenue expenditure instead of capital expenditure. This, according to him was not a wise move, as it led to larger fiscal deficit with proportionally lesser public good.
Sharing his views on the NK committee and the need to reinstate FRBM Act 2003, he emphasised the need to closely monitor the macroeconomic indicators and bring in discipline and prudence in implementing fiscal policies.
Dr. Rangarajan said, “Sometimes history offers very important lessons to learn” referring to the 1991 and the 2008 financial crises, which were largely due to the laxity in fiscal prudence.
In his inaugural address Dr. J Mahender Reddy, Vice Chancellor, IFHE, captured a snapshot of the life of late N J Yasaswy and his contributions to research and academia. On the occasion, Dr. Roy released a book titled “Tracking the Indian Economy: A Collection of Articles” authored by Dr. Rangarajan, and published by IUP Publications, a division of the ICFAI Society.