New Delhi, Feb 26 (ANI): Chief Economic Advisor in the Finance Ministry, Arvind Subramanian, said on Friday there is scope to ease Indian monetary policy with a better understanding to it through the twin challenges of state and entrepreneurial capacity.
Presenting the pre-Budget Economic Survey, Subramanian called for liquidity to be injected into the financial system and easing of policy rates by the Reserve Bank of India (RBI). He also said that it is long argued that the ability of a country to grow over the long run is critically determined by two factors: state capacity and entrepreneurial capacity.
However, he indicated to fundamental asymmetry between the two determined factors, which will make it easier to create markets than state capacity-or prevent deterioration in the latter.
“The Economic Survey suggests that these outliers will eventually revert to the mean. China will do so through slower growth combined with more democratization. India could do so in two ways. Either its economic growth will accelerate so that its income moves to a level that can be justified by its quality of institutions,” added Subramanian. (ANI)