New Delhi: Niti Aayog Vice Chairman Rajiv Kumar today said that he believes macro policy has to be counter- cyclical and he also said that it is wrong to compare household and government budget.
While talking at industry chamber CII’s Annual Session 2018, Kumar also said the Niti Aayog, which has replaced the erstwhile Planning Commission, is currently working to design performance and outcome-based parameters for all budget items in order to improve the efficiency of public expenditure.
“I strongly believe that macro policy has to be counter-cyclical. When private investment is weak and jobs are needed, then the government has to step in (with investment),” said Kumar at a session titled “The Fiscal Conundrum”.
“It is sheer nonsense to compare household with government budgets, a trend that was started with (former British Prime Minister) Margaret Thatcher,” he said, explaining that the whole is always much more than the mere sum of individual parts.
“We need to think of the fiscal situation of the country as a whole and for all the levels of government including the local,” he said, adding, however, that it was important to maintain a “delicate fiscal balance” and governments should not engage in populist measures.
“There is no reason for fiscal populism. It is to rein in politicians and governments taking populist measures that the FRBM (Fiscal Responsibility and Budget Management) Act, 2003, came along,” Kumar said.