Less dazzle would serve a broader purpose
Ever since the government started inducting a high-profile academic as its chief economic advisor, the Economic Survey tabled in Parliament a day before the Budget has become a vehicle for presenting the CEA's vision of development and policy priorities. Under Arvind Subramanian, more of a quant than many others, the Survey has also presented some very interesting data-based analysis to shake us out of lazy preconceptions about the Indian economy. But Subramanian was, is, and will continue to be a very active participant in the debates that are the current rage amongst policy economists and the economic commentariat.
This year's Survey is true to form. It includes an innovative use of big data on rail travel and sales tax invoices to present eye-opening analysis of internal migration and internal trade, both of which turn out to be far larger than expected. It also weighs in on a debate that has been raging amongst policy wonks on the case for and against a Universal Basic Income and ropes in Gandhiji as a fair mediator between the argument for, based essentially on efficiency considerations, and the arguments against, based largely on moral grounds. Accepting that it cannot be an add-on and should be financed by cutting back on existing household subsidies, it comes out "tentatively for" and seeks refuge in the argument that this is what Gandhiji would probably have concluded!
The Survey of course does its normal business of reviewing economic developments over the previous year, projecting expected short-term trends and throwing in some ideas for current preoccupations like the overleveraging in the corporate sector and the related nonperforming assets in banks, recovering from the trauma of demonetisation and the worsening of the fiscal position in the states. It sounds a warning, in my view too mild, about the retreat from globalisation.
The Survey has become a document that professional economists look forward to for the analysis and data that it presents. It has much more by way of formal econometrics and academic references than a typical government report. But the report is tabled in Parliament. Will the finance minister, who, it appears, actually drafted a section of the Survey, be ready to defend its suggestions in the House?
The Survey should not become just the voice of the chief economic advisor. It must play a role in conveying to the citizens and to market players how the minds of policymakers are working, what do they see as the problems which need attention, what are they likely to do to address these problems. This is important because expectations about future policies play an important role in shaping household and enterprise behaviour, for instance on when to buy a house or whether to invest now in capacity expansion. Yes, it should retain a certain objectivity and not become part of any disinformation campaign. But a Survey less dazzling in its intellectual virtuosity and more accessible to citizens who are not professional economists would serve a broader and more important purpose in a democratic country with a market-based economy.
But a Survey less dazzling in its intellectual virtuosity and more accessible to citizens who are not professional economists would serve a broader and more important aim in a democratic country