Economic Survey may contain a chapter on demonetisation

CEA, who hasn't said much on the move, may open up in his upcoming survey

Chief Economic Adviser (CEA) Arvind Subramanian, one of the government’s most visible faces, has not spoken on Prime Minister Narendra Modi’s demonetisation drive. However, his next Economic Survey is likely to contain an entire chapter on the move and its short-term and long-term impact on the economy.

The 2016-17 Economic Survey is likely to be presented a day before the Union Budget. The Budget, itself advanced by a month, could be presented on February 1. There is no official notification yet.

The upcoming Economic Survey, like Subramanian’s previous surveys, is likely to have a central theme. This year's theme could be ‘Universal Basic Income’. Officials involved with the process did not divulge the details on what that entails, but told Business Standard that Subramanian will present his views as CEA on demonetisation in detail.

“There will be a chapter on demonetisation. It is still being worked upon. A detailed data-based analysis will also be provided on the move’s impact on the economy and various sectors,” said an official.

Since PM Modi’s announcement on November 9, there has been no confirmation on who were consulted while the demonetisation programme was in its planning stages. The buzz in bureaucratic circles is that in-spite of being the Centre’s seniormost advisor on economic policy, Subramanian was not consulted. 

The only time Subramanian gave his views on the matter was on November 30. “What the impact (of demonetisation) on third quarter will be something that is subject to a considerable amount of uncertainty and we are in the process of analysing all the data and we will have the analysis in good time,” he had said.

He was reacting to the July-September gross domestic product (GDP) data which had come out that day and was asked his views on how the October-December and January-March quarters would be affected by the Centre’s move to put 86 per cent of cash in public hands out of circulation. 

“The monetary impact and long-term and short-term benefits are subject to a lot of uncertainty. Because we are in uncharted waters, we need to get a lot of data from hard analysis,” he had said.

In an interview with Business Standard in September, Subramanian had said the Economic Survey would lose its traditional structure. The erstwhile Volume I, with forward-looking themes and the CEA’s commentary, will be presented a day before the Budget. A proper data analysis, akin to a Volume II of 2016-17 will be released next July.