FM Nirmala Sitharaman asks regulators to align with changes

Finance minister Nirmala Sitharaman on Tuesday said regulators needed to be ahead of their time because there can be no regulation once the damage is done, adding that the pandemic showed the world India's institutions can rise to the occasion and address the stress points of the economy.

Delivering the keynote address at the release of the book 'Recalibrate: Changing Paradigms' jointly authored by NK Singh, Chairman of the 15th Finance Commission and PK Mishra, Principal Secretary to the Prime Minister of India at the Delhi School of Economics, Sitharaman backed the debate on freebies.

Sitharaman said India was at a cusp of change and regulators had to be aligned with that change. "You need regulators also to be aligned with that change, recognise that change, and be ready for it ... otherwise you will be late, and delay in regulation can hit the people, and also institutions and the economy," she said.


The FM cited extracts from the book that made a case for harmonisation of the role of regulators as an overlap of authority could have implications for regulations.

Freebies & Inflation MGMT
"Freebies or no freebies? All must be transparently provided in the budget itself, and that itself will be a very, very fundamental change to the nature of the debate on the freebies if they are explicitly provided in the budget," Singh said.

The Supreme Court recently asked the government to constitute an expert body to define freebies. The apex court suggested setting up a committee consisting of the Niti Aayog, Finance Commission, ruling and opposition parties, the Reserve Bank and other stakeholders.

On the need of recalibrating policymaking, Singh said that inflation management required the involvement of all stakeholders.

"The issue of inflation is far beyond what the Reserve Bank (of India) can do, it is far beyond monetary policy. Because it requires much bigger consensus among stakeholders," Singh said.

Speaking on the occasion, Mishra said there is a need to give greater emphasis to health and education in policy making.

"We need to talk about health because, as it has been shown by a lot of quantitative research, our growth, whether it is agriculture or even economic growth, depends a great deal on education and health," Mishra said. He said while technology has helped in many ways yet there is a need to talk about the digital divide.

"People who are not having any access to technology, not having a laptop or not having a good connection in the remote areas, there can be more deprivation, more inequity," Mishra said. "So, when we talk about technology, whether it is educational or health related, we must talk about how to breach this digital divide and how to have more accessibility to our people who are underprivileged."