Bengaluru: Former chief economic advisor (CEA), Arvind Subramanian who had unleashed a storm of sorts in political circles a few days ago, by describing demonetisation as 'draconian,' continued in the same vein dubbing the abrupt move unleashed by the Modi government in 2016 as a 'structural shock' but preferred not to go to the extent of calling it good or bad.
In Bengaluru to unveil his new book, Of Counsel: The Challenges of the Modi-Jaitley Economy, Mr Subramanian engaged in a conversation with former Infosys chief Nandan Nilekani which saw him saying, “It is still puzzling how demonetisation which hurt 85 per cent of people who depend on cash, has not had a severe impact on GDP growth. Still, in elections, the party (BJP) wins. Of course, it will be interesting to see how historians finally view it." Nor did Mr Subramanian launch an outright attack on the NDA government on controversial issues like the RBI-government conflict, the GDP measurement mechanism and the appointment of the new RBI governor. On the government-RBI stand off, he felt the RBI was over-capitalised.
"I think some capital should be re-channalised to improve the economic system. But certainly not to fund some schemes which will hurt the economy in the long run," he said striking a different note from BJP critics who had vehemently opposed any move by the government to reduce the RBI’s capital reserves.
Refusing to get into a debate on whether the appointment of Shaktikanta Das as the new RBI governor was right or wrong, Mr Subramanian said, "As long as autonomy is protected, there will be no issues." He however asserted that there should be a continuous dialogue between the government and RBI as the former deals with economic processes. He dodged a question on whether the Manmohan Singh-Chidambaram duo was better compared to the Modi-Jaitley jugalbandi.
On the Swadeshi versus Videshi debate, Mr Subramanaian remarked that one should assess the performance based on merit rather then get into a debate. "Nothing wrong in engaging with the Swadeshi school and we should," he said at the event held at Bangalore International Centre on Thursday.
