EDIT: EARLY EXIT
The CEA has been an enlightened voice for reform
Chief Economic Advisor Arvind Subramanian will be leaving his post several months early. He has been a part of the Narendra Modi-led central government since October 2014, and his early departure will leave a serious hole in the administration's economic policy-making team. Any CEA, as Mr Subramanian pointed out in his own farewell note, occupies an ambiguous position — both in government, as a senior advisor, and out of it, as a neutral technocratic advocate for politically sensitive reform. There are essentially three parts to a CEA's job. The first is to push for suitable policy outcomes within government, and pronounce on intended actions. The second is as a public advocate for reform. And the third is as the author of the Economic Survey, the government's primary economic policy document.
It is fair to say that in this last role, in particular, Mr Subramanian has left a deep impact. His Surveys have been distinguished by a willingness to use the data and resources available to the CEA's office to intervene on important issues and raise new fields of inquiry. The Surveys have provided valuable inputs into debates as wide-ranging as the applicability in India of a universal basic income, India's "missing women" and whether the Piketty thesis on inequality is valid in this country. Along the way, some might worry that the Survey no longer acts as a document of record, a single location for all the relevant data of the year. It is also true that the data release cycle has unfortunately been disrupted. But, overall, Mr Subramanian's successors will find it hard to match the mark he has left on the Surveys. Hopefully, his tradition of bringing in many young talented economists to assist will outlast his tenure as well. It was also through the Surveys that Mr Subramanian introduced many of the concepts — the twin balance sheet problem, the "JAM" trinity, "stigmatised capital" and so on — that were his contribution to the national discussion on economic policy reform in India. He has also succeeded in making his views known without ruffling feathers, something not all recent CEAs have managed. Mr Subramanian has even provoked a reassessment of the RBI's management and prediction of inflation without causing a crisis in relations between North Block and the RBI.
Given his efforts, if Mr Subramanian's performance in the first and primary role of the CEA — as a policy counsellor to the government — has been mixed, then it can hardly be said to be his fault. He was opposed to the multiple rates of goods and services taxation and fought a bitter but losing battle. But he never admitted defeat and remained an activist-optimist, with an excellent relationship with his minister throughout. He was not consulted on the government’s other big step, demonetisation, but would most certainly have opposed it. The truth is, of course, that the government does not have the reformist instincts that many thought it did back when Mr Subramanian joined it in 2014. Thus, he has not been able to make as much headway as he might have otherwise. Being the chief economic advisor to a government that does not place any great premium on policy is not an easy job, but Mr Subramanian managed to remain an enlightened and independent voice on reform throughout despite that handicap.