Reserve Bank of India (RBI) governor Bimal Jalan today hailed the contributions made by former RBI governor M Narasimham towards the planning and growth of the Indian economy.
"While many developing nations like Mexico, Brazil, Argentina and South Africa have witnessed economic crises during the nineties, India, thanks to the path of reforms laid by Narasimham, has sailed through the turbulances smoothly. We would not have successfully saved our skins from the changes in the external world without the Narasimham 1 and 2 ( reports on the two phased reforms) recommendations," opined Jalan while releasing 'Economic Reforms - Development and Finance', a book written by Narasimham, the present chairman of the Administrative Staff College of India.
The book is a collection of lectures delivered by Narasimham over the last 15 years on economic and development policy issues.
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"In the final analysis, the task of India's development is an Indian responsibility. It is up to us to create a policy frame and investment pattern to subserve our objectives of growth, distributive justice and self-reliance. The 40-year old model of centralised planning with which we tried to reach these objectives has not measured up to either our expectations or potential.
The present is an opportune time to chart a different course, the beginnings of which are to be seen in the efforts to deregulate and liberalise our economy in the eighties.
"An indicative planning model based on greater reliance on the price mechanism and competitive markets, with the state only providing broad macroeconomic guidance and assuming responsibility for social services and infrastructure, might be the answer to our continuing and necessary quest for growth, distributive justice and self-reliance," Jalan recited a passage from the book, saying that the words are relevant even in today's situation, though they were spelt out ten years before.
Narasimham said reform is not an event but a process and there is no finite end to reform. The process is an on-going one and should cover more areas of the economy, such as agriculture and small industry apart from the labour market, he said. He advocated moving away from a central command economy as the pattern of economic management to an indicative model of planning which is more market oriented and has a major role for the price mechanism.
Narasimham said the reforms initiated in 1991 represented more than a policy response to the economic circumstances of the time. "They constitute in a real sense a paradigm shift in our views on economic management and recognition of the role of the state as a facilitator rather than as investor in the pursuit of development," he added.
The world has now embarked on the knowledge revolution and we cannot afford to miss it as we missed out on the industrial revolution, he said.
ASCI principal E A S Sharma, RBI deputy governor Y V Reddy and managing director of UBS Publishers and distributors Sukumar Das were also present on the occasion.