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Pity Indian policymakers who don't know which data to go by for economy

Designing policies meant for a smaller economy that is actually larger is sure to have unintended side effects.

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T C A Srinivasa-Raghavan
Five years on from demonetisation some strange things have happened to the economy. A lot of data is pointing in divergent directions. 

This makes things harder for policymakers because not only do they have to work with contradictory data, the date also doesn’t quite reflect reality. 

Consider, in this context, two reasonable proxies for economic activity—cash in circulation and digital transactions. 

According to RBI data, cash in circulation as of August 2021 was Rs 29.4 lakh crore, much higher than the Rs 17.8 lakh crore it was in the month preceding demonetisation.

Some part of this can be put down
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

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