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Why CEA Subramanian says private sector’s ‘Papa Bachalo’ mindset must change

FE Online
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Even as the economy sees sluggish demand, Chief Economic Advisor (CEA) Krishnamurthy Subramanian has asked the private sector to change its mindset of ‘socialising’ losses in times of stress. The private sector must distance itself from the habit of grabbing profits and demanding sops from the government in times of financial stress, news agency PTI reported citing the economist as saying at an event on Wednesday. During difficult times, India Inc’s “Papa Bachalo” mindset must change, TV news channels reported on Thursday citing Krishnamurthy Subramanian as saying at another event. Talking particularly about the auto sector, he said that what is happening with the automobile companies is not symptomatic of the economy. CEA also said that the government has its eyes set on growth and will do all it takes to boost the GDP. However, India Inc. can’t expect the government to pitch in everytime some of its sectors go through slowdown, he also said.

“This 30- year-old man and must start to stand on his own feet. This adult cannot keep asking his father for help and live with the idea of personalizing profit and socializing losses,” the news agency reported citing Subramanian as saying while comparing the corporate sector to a grown up which benefited the most from the reforms during economic liberalisation in 1991.

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Adding, Krishnamurthy Subramanian said that the economy now needs to focus on investment as against consumption which drove growth for the last ten years. It’s time to get back to investment which has lost substantially in the last six to seven years, he added.  The previous UPA government didn’t do much to bring about structural reforms in the economy, which finally led to the current financial mess, he also said at the event. However, the current government under Prime Minister Narendra Modi is completely focusing on growth, he also said.

Meanwhile, the private sector including auto and FMCG has recently raised concerns about the growing weakness in consumption and even warned the government about the likely job loss. India Inc has also asked the government to bail it out from the fiscal mess through a stimulus package at the earliest. The ongoing slowdown in the economy is something that is very worrisome, former RBI governor Raghuram Rajan had told CNBC TV18 recently.