Chief Economic Advisor (CEA) Krishnamurthy Subramanian on Wednesday said further announcements as part of the government's plan to boost the economy would be reform-oriented. He also said the economy would witness a V-shaped recovery.
"Most people are more pessimistic than they need to be,” said the CEA on various assessments of an economic recovery. He was addressing a virtual conference organised by All India Management Association (AIMA).
He listed land, labour, law, and liquidity as the key areas of big reforms.
Subramanian also expected reforms in public sector banks. He said these lenders were reluctant to lend even before the Covid-19 pandemic hit India, and have remained so during the current crisis.
He said the stimulus package would address the supply-side impact with liquidity injection.
Businesses do not have revenues, even as they bear fixed costs, he said, adding their variable costs have not declined much. “The liquidity issue may create solvency problems for firms,” he remarked.