Profit is not a dirty word: CEA Subramanian

In his keynote address on ‘Policy initiatives: Aspects for Privatisation, Monetisation, Decentralisation,’ of a virtual event hosted by the ‘Industrial Economist’ magazine, he liberally quoted from ‘Thirukkural’ to drive his points home. Such literary treatises, he believes, express profoundness of ideas that are extremely relevant be it for an individual, society or a nation. The three ‘vertices of the triangle or a tripod,’ Subramanian said, were the ‘Jeevatma’ for growth and development. 

Explaining the separation and complementary nature of growth and welfare, he said the stage of development of our country is quite different from others. So, one must refrain from “cut and paste” methods to replicate from advanced economies, as such developed nations did not have the experience of absolute poverty. 

The CEA said rather than conflict between growth and poverty alleviation, the emphasis has to be on convergence, as 80 pc of the poverty reduction was enabled through growth since independence. For seventeen and half centuries from 1 AD, India had contributed 33 pc of the world GDP, he said, referring to the works of the economist Angus Maddison on GDP. US, in comparison, contributed 16 to 17 pc of the world GDP. This reflected India’s dominance and the quality of economic model, which in Thirukkural, can be interpreted as ethical wealth creation. “Profit is not a dirty word,” the CEA said. In fact, the filter used to craft an economic model to achieve the $5 trillion goal, was to identify those countries that had posted 5 pc growth in real terms for at least a decade in the past century. He also spoke about ‘Dharmic capitalism’ and how development is “path dependent.” The need of the hour is to evaluate the appropriateness of the ideas relevant to India’s economy, he added.