Former RBI governor demands Centre’s white paper on freebies for political parties

Hyderabad:

Former Reserve Bank of India governor Suba Rao said the Modi government should come out with a “white paper” to create consensus among political parties on the issue of giveaways or freebies.

The former RBI governor said there must be a thorough debate on how to impose restrictions on political parties in this regard. He added that the public should be made more aware of the costs and benefits of these freebies and it was the government’s responsibility to educate them.

“I think this is ultimately a political issue and there has to be a political consensus on it. The leadership has to be with the central government and the prime minister. I believe they have to come up with a white paper and try to reach consensus on it.” “Let people understand the pros and cons of these giveaways or freebies (and ensure) how we limit it and how it is enforced,” Subbarao told PTI in a recent interaction.

He said that in a poor country like India, it was the government’s responsibility to provide some safety nets to the most vulnerable and to reflect on how far these safety nets could be extended given fiscal constraints.

“You should be asking (whether) this is the best use of the money or can we do better. So I think we should have a more informed and robust debate about freebies and how we can put some restrictions on political parties,” he thinks.

For some states that are crossing fiscal responsibility and budget management (FRBM) limits, he said states and the central government should maintain fiscal discipline and adhere to FRBM targets.

In response to a reporter’s question, Subbarao said that according to a study by the International Monetary Fund, India needs to maintain a growth rate of 7.6% until 2047 to become a developed country.

“In the next 25 years, we will maintain an annual growth rate of 7.6%. Several countries have achieved it, and China has achieved it. But the more difficult point is that it is difficult to say how difficult it will be to face climate change, geopolitics, and globalization.” Subbarao explain.

The former RBI governor said developed countries will have four pillars – rule of law, strong states, democratic accountability and institutions.

“We can’t say that we don’t have them, and we can’t say that we have them all. So these are things that we have to cultivate and develop.” Subbarao had previously said that even if Prime Minister Modi envisages becoming the world’s largest economy by 2029 With the third largest economy, India may still be called a poor country and therefore not something to celebrate.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)