New Delhi: Sanjeev Sanyal, principal economic adviser to the finance ministry, has said the overall framework of providing subsidies by the government needs to be changed. Talking about the farm sector, he said that India is producing more food than it can consume. “MSP is one way of holding up food prices,” he told CNBCTV18.
Elaborating on the agrarian crisis, Sanyal said, “As far as the farm sector is concerned, I think we need to be clear on what is the issue that the farm sector is facing. In the past, the problem was drought, floods or weather-related factors. Now because of our own success and increasing farm production, we have ended up in a situation where we are producing a lot more food than we can possibly consume."
Talking about the rising concern of fiscal deficit, he said the government remains committed to fiscal consolidation and India could take advantage in many areas including lower energy prices.
The government data released on Thursday showed that the fiscal deficit in the April-November period stood at Rs 7.17 lakh crore or 114.8 per cent of the budgeted target for the fiscal year that ends in March.
“I would argue that there are some challenges but there are many areas where India can take advantage of the situation from lower energy prices, somewhat easier, global interest rates and perhaps a liquefied global supply chain where we can insert ourselves and many other things as well,” he said.
Sanyal said that some apprehensions about the global economy were slowing down and added that "we will see some tightening globally but lesser than anticipated earlier".
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