Only Reform is Salvation

After the repo rate cut by 25 basis points — from 7.50% to 7.25% — under the Liquidity Adjustment Facility (LAF), the question remains as to what will be the driver of growth. It is stated in the policy itself that “recent monetary policy action, by itself, cannot revive growth. It needs to be supplemented by efforts towards easing the supply bottlenecks, improving governance and stepping up public investment, alongside continuing commitment to fiscal consolidation.” Pressure on the current account deficit (CAD) will not allow the Reserve Bank to move forward in the direction of further liberalisation of policy. Again, according to recent reports, there is a continuous decline in the number of farmers, having gone down by nine million in a decade. So, it is now an established fact that for further growth, reforms in labour laws are quite essential to absorb more workers in formal occupations. 

- SHISHIR SINDEKAR, Nasik  (ET)