CEA Krishnamurthy Subramanian Differs From Niti Aayog VC, Says Private Sector Must Change its 'Papa Bacha Do Mujhe' Attitude

Mumbai, August 23: With the economic slowdown in India reaching a scary situation, Chief Economic Advisor Krishnamurthy Subramanian stated that the government intervention in the private sector creates a "moral hazard". He also opined that the private sector must change its "papa bacha do mujhe" attitude during difficult times and not ask for government support.

Speaking on the plunging economy on Thursday, Subramanian stated that companies can not live with the idea of privatising profits and socialising losses. Subramanian's views were quite the opposite of NITI Aayog vice-chairman Rajiv Kumar. The CEA pointed out that India has been a market economy since 1991, when it opened up to the foreign competition. Niti Aayog Chief Rings Warning Bell: 'Government Should Take Steps to Deal With Unprecedented Stress in Financial Sector That is Resulting in Slowdown'

Expressing his opinion, Subramanian stated, "If we basically expect the government to use taxpayers' money to intervene every time when there are some 'sunsets', then I think you introduce possible moral hazards from 'too big to fail' and as well as the possibility of a situation where profits are private and losses are socialised, which is basically an anathema to way the market economy functions."

However, NITI Aayog vice-chairman Rajiv Kumar stated that a situation economic slowdown had not been witnessed in the past 70 years. He called for urgent steps to reverse the situation as the entire financial sector was under threat.

Stating that nobody is trusting anybody else amid unprecedented stress in the financial sector, Kumar said, "If the government recognises the problem is in the financial sector, this is an unprecedented situation. From the last 70 years, we have not faced this sort of liquidity crunch, where the entire financial situation is in churn, and nobody is trusting anybody else." Indian Economic Crisis: From Parle to Maruti, Iconic Indian Companies Hit By Slowdown And Dwindling Sales Stare at Job Cuts.

Earlier, reports arrived that Indian companies across industries are desperately fighting the weak economic situation in the country. Global news agency Reuters had reported that nearly 10 lakh people working in the automobile sector are on the verge of losing their jobs.

(The above story first appeared on LatestLY on Aug 23, 2019 01:15 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).