‘Fi­nally, the CEA has Spo­ken’ on De­mon­eti­sa­tion

The Economic Times - - Economy: Macro, Micro & More - Our Bureau

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.


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.


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.


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.


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