DESCRIBING THE implementation of four reforms by states, which were linked to additional borrowing by them during 2020-21 and were announced as part of Aatmanirbhar Bharat package in response to the pandemic last year, as a “rare nudge” in Indian public finance, Prime Minister Narendra Modi Tuesday contrasted his government’s model of “reforms by conviction and incentives” against the earlier regimes’ model of “reforms by stealth and compulsion”.
“We have often seen that for various reasons, schemes and reforms remain un-operational often for years. This was a pleasant departure from the past where the Centre & States came together to roll out public friendly reforms in a short span of time amidst the pandemic,” he wrote in a post on social media platform LinkedIn.
“India has seen a model of ‘reforms by stealth and compulsion’. This is a new model of ‘reforms by conviction and incentives’.”
“When we formulated our economic response to the Covid-19 pandemic, we wanted to ensure that our solutions do not follow a ‘one size fits all’ model,” he wrote. “For a federal country of continental dimensions, finding policy instruments at the national level to promote reforms by state governments is indeed challenging. But we had faith in the robustness of our federal polity and we moved ahead in the spirit of Centre-State bhagidari [partnership].” The Prime Minister said 23 states borrowed an extra Rs 1.06 lakh crore by implementing four reforms linked with the additional borrowing permission granted under Aatmanirbhar Bharat package in 2020-21.