‘Finally, the CEA has Spoken’ on Demonetisation
New Delhi: “Finally, the CEA has spoken,” Arvind Subramanian said on Tuesday, taking a dig at the criticism that he had been silent on demonetisation. The Economic Survey 2016-17 shows the chief economic adviser had a lot to say on the cancellation of old high value notes in November. The crux of it was: short-term pain can yield longterm benefits with some follow-up measures. He estimated a 0.25% to 1% impact from demonetisation while telling the media to refrain from “misinterpreting and mischievously interpreting” GDP projections.
RBI GOVERNORS IN THE SURVEY
The Economic Survey released on Tuesday says the developments around the appointment of the RBI governor were one of the many factors that impacted domestic market last year. "In addition, other factors which weighed on market sentiment included the policy decisions taken by the OPEC (Organisation of the Petroleum Exporting Countries) regarding oil production and the appointment of the new governor of the RBI," the Survey said. Urjit Patel was appointed governor just a couple of weeks before Raghuram Rajan’s term ended.
On the flip side, Subramanian said, the Survey benefitted from the comments and inputs from both Rajan and Patel.
IS SURVEY A GOVERNMENT DOCUMENT?
Subramanian clears the air on the status of the survey. “The Economic Survey is at once a government document and also an opportunity for the chief economic adviser to provide a disinterested, objective economic analysis,” he said. The Indian Constitution does not require the government to present an economic survey, but now it has become a to bring out one before the union budget. Most countries including the USA and those in the Scandinavian region and the European Union publish such surveys. The first Survey was presented in India in 1950-51 and up to 1964 was clubbed with the union budget. From 1964, it has been delinked and now presented before to set the stage for the budget.
…BUT THIS YEAR WE WILL HAVE TWO
The Survey this year has only one part, largely dealing with the issues faced by the economy. A second installment of the survey will likely come in the summer. The second installment will have a comprehensive, sector-by-sector review of the economy.