Double digit growth likely till 2022-23, says Principal Economic Advisor

Sanjeev Sanyal makes strong pitch for better urban governance, infrastructure.

Sanjeev Sanyal.

India’s economy is likely to grow in double digits this year as well as next year with the higher revenue collections giving the Centre more room to push capital spending, Principal Economic Advisor Sanjeev Sanyal said on Tuesday, before making a strong pitch to fix India’s cities.

Cities in distress

“Some of our cities in peace time don’t have roads like Kabul had in war time. Vietnam has the same per capita income as India’s but Ho Chi Minh and Hanoi are radically better run cities than ours,” Mr. Sanyal lamented, contrasting this with the ‘shockingly poor’ roads and municipal services in some of India’s tier-three cities.

“When I was younger, I used to think we are a poor country so our cities are in this mess. 30 years later, we are much richer as a country, but our cities are still in a mess, the occasional airport notwithstanding… We are not at all clear on what we want from our cities,” he noted.

While infrastructure in Mumbai and Delhi is ‘relatively better’, Mr. Sanyal said the next generation of reforms must focus on intra-city infrastructure and better municipal services like garbage collection.

“Many of these old masterplans, Le Corbusier-inspired planning and ideas that we still teach by the way in the SPA (School of Planning and Architecture) and other institutions, first of all, we need to throw them in the dustbin. We need to have modern planning principles, teach them, ensure our municipalities understand and build modern cities,” he asserted.

He suggested the focus of urban reforms should shift from what is the appropriate governance structure to putting someone in charge and getting them to deliver what needs to be done.

“It’s not as if poor people do not know what to do with world class infrastructure. The reason the rich are rich because they have access to good infrastructure. If you give the poor access to world class infrastructure, they will also become rich,” Mr. Sanyal said, while speaking to industry leaders at the CII East India Summit.

“The best solution to poverty is to create access to good infrastructure in parts of the country that don’t have it,” he said, referring to the need to build world-class infrastructure in Bihar, Uttar Pradesh and the North-eastern States.

Arguing that the government’s focus on supply-side reforms and capital expenditure amid the pandemic will hold it in good stead, he said it is important for the economy to be flexible to adjust to the post-COVID world.

“I think you will find that this year, we will hit double digit growth rates and it is quite likely that we will hit double digit growth rates in the next financial year as well,” the former golbal strategist for Deutsche Bank said.

“We have even done politically difficult reforms like farm laws that may be in abeyance but let me say that broadly, we remain committed to reforming agriculture even if some changes may have to be done on the edges,” he said, stressing that the judicial system also needs to be cleaned up to enable timely enforcement of contracts.

Emphasising that the reforms from 1991 to 2021 have been about deregulation and withdrawing the State from things that it ought not to do, Mr. Sanyal said the next thirty years of reforms should focus on what the Indian State ought to do for its people, which includes providing reliable infrastructure.