Cautioning that time may be running out for Modi government to start thinking long-term for sustained economic growth, noted economist Ila Patnaik said any 'substantial reform programme' to solve Indian economy's core problems is not visible as yet.
"Certain efforts are now being made, but the last two years should have seen far greater action... The core problems of the economy require a substantial reforms programme which is not, as yet, visible," said Patnaik, a former Principal Economic Advisor in the Finance Ministry.
"Business cycle downturn began in 2012. There was a lot of optimism that the new government would dramatically change things. A broad-based recovery is not visible. In particular, private investment revival is still to be seen.
"...There are few quick and easy solutions to generate the employment growth that can absorb India's young labour force and the time for thinking long term is fast running out," Patnaik told PTI.
Observing that the Gross Domestic Product (GDP) data is showing some good things, she said trusted private sector measures show little revival of business cycle conditions.
She expressed concerns over the likelihood of a continued lack of pick-up in private investment through 2016-17, saying that the economic growth cannot be sustained unless private investment picks up.
"Public investment is constrained both by government funds and state capacity and can have a positive but only limited impact," said Patnaik, a professor at National Institute of Public Finance and Policy (NIPFP).
On the likelihood of good growth driven by above-normal monsoon, she said the monsoon is less important than we think, given the declining share of agriculture and the substantial shift of rural employment to non-agricultural activities.
"The global economy is more important than we think, given India's deepening engagement with the world. The core problems of the economy require a substantial reforms programme which is not, as yet, visible," Patnaik said.
Patnaik's statement assumes significance as last week Economic Affairs Secretary Shaktikanta Das had said the Indian economy may grow near 8 per cent in 2016-17 on the back of good monsoon.
Patnaik is a PhD in economics from the University of Surrey, UK, and an M Phil in economics from the Centre for Economic Studies and Planning, Jawaharlal Nehru University.
