Finance Minister Nirmala Sitharaman on Tuesday said it is time for multilateral institutions like the World Bank and International Monetary Fund to recalibrate their functioning to remain relevant in the post-pandemic world.
Recalling Prime Minister Narendra Modi’s statement about reform in multilateral institutions, the finance minister said they have to make themselves relevant for the 21st century.
“The series of global calamities, some which are directly affecting the financial sector, have made the debate necessary and not just the debate, I think it’s time for multilateral institutions also to make themselves relevant by seriously taking a call at recalibration,” she said.
She was speaking at the launch of a book titled ‘Recalibrate: Changing Paradigms’, authored by Finance Commission Chairman N K Singh and P K Mishra, Principal Secretary to the Prime Minister.
Referring to a chapter on the role of regulators, the finance minister said they will have to be ahead of the times because regulation cannot be after the damage is done.
“So on that chapter, we find how overlap of authorities happens and because of that, what can be the implication… He (author) also finds a parallel that India is at a cusp of change,” she said.
Speaking about a chapter on freebies, Sitharaman said there is a need for a wider debate on the issue.
Observing that India is a country with established traditions and has a lot of institutional strength, she said “some institutions are very vibrant and some are probably less vibrant.”
“But nevertheless, as envisaged in the Constitution, institutions are in place. Institutions will have to be rejuvenated periodically. I find a very powerful case being made for a Fiscal Council, which is not new to this book. N K Singh has been talking about it,” she said.
During the pandemic, she said, various institutions like the GST Council, Finance Commission, cabinet secretariat, Prime Minister’s Office and finance ministry played a very critical role in dealing with the situation.
“This pandemic stands before us as an example, not just for us but world over there is a recognition that India managed to come out of (the pandemic). There is of course a lot more work to be done, I am not saying it’s concluded.
“The pandemic has shown the world that India’s institutions can rise to the occasion even if it’s a Black Swan (event) and address the stress points of the economy and we could build on and give impetus to growth,” she said.
Speaking at the event, Singh said everything — freebies or otherwise — have to be transparently provided in the Budget, as was said by the finance minister recently.
Overall strategy of economic management is the interplay between policies, personalities and politics, the Finance Commission chairman said.
Mishra said focus on education, health and agriculture are important for economic growth.
“We have done a lot of work on agriculture since the green revolution. We have done tremendous work in agriculture and agriculture growth but there is still talk of farmer distress.
“What I have tried to hypothesise is that agriculture is probably riskier than other economic activities. How to address the risk and that problem we have not been able to address as much as we should,” Mishra said.
Speaking on the sidelines of the event, Mishra said a lot of debate is going on regarding freebies but one also has to distinguish what is necessary for welfare and for improving people’s economic situation.