The right time for a fiscal push from the government’s side will be once the vaccine for COVID-19 is available, Chief Economic Advisor (CEA) Krishnamurthy Subramanian said on Wednesday, at a webinar organised by the Federation of Indian Chambers of Commerce & Industry (FICCI). “Once we get the vaccine of COVID-19, the uncertainty will go down and that will be the right time for a fiscal push,” Mr Subramanian said, while addressing FICCI’s 17th Annual Capital Market Conference ”CAPAM2020”.
The CEA said fiscal policy is important but timing is very important, adding that government is willing to push consumption but timing will matter. Mr Subramanian also laid emphasis on the role of banking in the economy. He said it is very clear that the banking sector is holding back our growth.
“The third-largest economy cannot be built by a banking sector low on scale. If we see the top 100 global banks, India has only one bank on that list while China has 18 banks. India lags in terms of large banks, a lot of work needs to be done. Banks are not doing a good job of lending to large borrowers and the quality of allocation is not very good. Public sector bank networks must pool data. The government as the owner has the right to force all PSBs to share data,” he added.
The CEA also highlighted the use of fintech by banks and ethical lending as being most important for the economy. He said if artificial intelligence can design a strategy and tactics for chess and defeat Chess champion, Gary Kasparov, it can certainly defeat wilful defaulters.