India needs its version of DOGE, weak rupee helps economy, says economist Rajiv Kumar

Kochi: India needs its own version of ‘DOGE’ -- the Department of Government Efficiency -- which US President Donald Trump has introduced in his second term with billionaire Elon Musk at its helm, noted economist and former Vice Chairman of Niti Aayog Dr Rajiv Kumar said in Kochi on Wednesday. Dr Kumar made the figurative reference to the Trump experiment while calling for radical reforms in the nation’s economy to get itself out of what could be termed a debt trap.

Kumar, a former economic advisor in the Union Finance Ministry, was delivering the 26th edition of Malayala Manorama’s Budget Lecture at Le Meridien, Kochi. At the core of his reformist agenda was his conviction that private entrepreneurship should be promoted maximum. He suggested that the country has to liquidate as soon as possible its debt service which comes around 3.6% of the Gross Domestic Product (GDP); exactly the same as capital expenditure. As a measure of finding money for winding up the liabilities, he proposed what might sound sacrilegious to those who are on the pro-public sector side of economics: sell off public properties which lie underutilised.

“Your debt servicing is 27% of your total expenditure. More than a quarter of your total expenditure today goes into paying off the principal and interest that you've taken in the past. So that's a mountain there. And every year, because you incur a fiscal deficit, this mountain keeps becoming higher. In my view, you have to liquidate this as soon as possible. And can you liquidate this? Yes, because this year's budget has announced that they have a target of asset monetization of Rs 10 lakh crore up to 2030. We can do asset monetization of up to 10 lakh crore every year if we come onto it,” he said.

Then he explained: “Think about it, the lands, the building that you've got. I remember thinking about a telecom sector building on the middle of Janpath, right in the heart of Delhi, which would be sold for thousands of crores (of rupees). And how many such buildings would the public sector enterprises and telecoms have? The state governments, with their large number of public enterprises right in the middle of town which are not being used efficiently, etc! What you need is an Indian version of DOGE, which Trump and Musk have announced. That is the radical thing that you can do because if you can actually work towards liquidating it (public debt), India will be a much happier country.”

Dr Kumar said the Union budget presented by Finance Minister Nirmala Sitharaman on February 1 is very important because it has announced some measures which is trying to promote private entrepreneurship and reduce the licensing and compliance burden. He also proposed that the government should shift its focus from making ‘ease of doing business’ to making entrepreneurs feel ‘the joy of doing business’.

Dr Kumar also sounded unconventional when he said a ‘weak rupee’ (as against the US dollar) was good for the economy. “We need a strong rupee to be able to finance our current expenditure for sending our children for education, our tourism and then our energy consumption. But a weak rupee helps our exports and our exporters,” he said. His argument was that the middle class likes a strong rupee while a weak rupee has its own benefits for the economy. Amid his speech, he went for a voting among his audience and those who wanted the strong rupee won by a brute majority.

He found it as a sign of what he called the country’s export pessimism. “We think we will export our workers, we will export our talent. We educate them here and then give them to serve the other countries. But we will not export our goods and our services. A strong rupee is good for the middle class, as you have shown now. But it's not good for the country as far as I'm concerned, if you want to raise your exports,” he said.

Touching on the Kerala economy, Dr Kumar sounded rather impressed with the state’s human development indicators and remittances revenue. “Kerala can be the driver of national growth rather than pursuing it,” he said.