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Fixing software bugs in India’s economy -Arvind Subramanian and Josh Felman

-Livemint.com

* Beyond the Budget, the key to reviving growth lies in improving economic stewardship. Here’s how

* In the upcoming Union Budget, measures must be urgently taken in order to address the protracted and worsening Twin Balance Sheet problem, including revitalizing the IBC.

NEW DELHI: The upcoming Union Budget is a critical one, for it offers an opportunity to reset the economy so that it can boom again in the coming years. But this opportunity can only be seized if the Budget is based on a sound diagnosis of the problem: Where are we now and why? This piece aims to serve up a diagnosis and suggest a way forward.

In brief, we think that while new reform measures are always useful, the key to reviving growth lies in improving the “software" of economic stewardship, which is an ongoing effort, going beyond and after the Budget.

The diagnosis

The government has been energetic in trying to improve the economy, taking many important actions. These include the goods and services tax (GST), aimed at turning the country into a true common market; the Insolvency and Bankruptcy Code (IBC), aimed at addressing India’s intractable problem of “capitalism without exit"; and inflation targeting combined with a broader promise of macro-economic prudence.

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