MACRO-PUBLIC FINANCE

Speakers: Dr. Arvind Panagariya (Chairperson of Finance Commission), Shri Ajay Seth (Finance Secretary & Secretary, Department of Economic Affairs), Prof. Prachi Mishra (Head and Director, ICPP)

Moderator: Shri NK Singh (Former Member of Rajya Sabha)

Shri NK Singh contextualized India’s macro-fiscal policies within a post-COVID paradigm shift. Fiscal orthodoxy, once defined by fixed thresholds, now requires dynamic recalibration. Singh called for extending scrutiny to state-level finances, warning of a growing misalignment with central policies.

Dr. Arvind Panagariya added nuance, suggesting that moderate inflation (around 4%) is desirable for a developing economy. He addressed India’s long-run development goals, arguing that sustained 7–8% growth could allow India to meet its “Viksit Bharat 2047” vision. He highlighted the growing strategic space India occupies amid US-China trade decoupling. However, trade gains, he cautioned, hinge on deeper bilateral engagements.

Shri Ajay Seth provided a multilateral lens, highlighting energy security concerns dominating the Global South’s development agenda. He advocated for a rebalanced fiscal policy that promotes capital expenditure while cautioning against financing current consumption from public funds. He raised the imperative to raise the tax-to-GDP ratio and called for performance-linked fiscal transfers.