The Narendra Modi government has decided to extend tenure of Chief Economic Advisor Arvind Subramanian, according to The Indian Express report. Subramanian, who was appointed as the CEA in October 2014 for a three-year tenure, has lauded PM Modi’s demonetisation move. Now his tenure will be till October 2019. Confident of economic recovery post demonetisation, Chief Economic Adviser Arvind Subramanian had said remonetisation will be completed in a month or two and growth will pick up once the process is over. The demonetisation is an “unique experiment in monetary history” and 50-100 PhDs thesis would be written on it after five years, Subramanian had added.
Interestingly, Subramanian shares a good rapport with Union Finance Minister Arun Jaitley. He was closely involved in drafting the Goods and Services Tax Act. “His most recent Economic Survey captured a range of political economy issues at the heart of a changing India. Like the finding, based on rail passenger traffic, that annual migration within India touched 9 million, much higher than previously estimated,” the report said.
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Last October, he chose Sabarmati to flag the idea of a “universal basic income” scheme. Subramanian has also pushed for higher spends by the government at a time when the private sector was reluctant to invest, and advocated the setting up of a state-owned asset reconstruction company to take care of the mounting bad loans problem, the report said.
Hailing the decision of the US Fed to overnight increase the funds rate to a target range of 0.75 percent to one percent, Subramanian yesterday said that it was anticipated with a probability of 100 percent and added that this move should not be seen as a surprise. Talking about the affect of the rate hike on the Indian market, Subramanian said there is very little volatility in the market, adding there is, however, pressure on the rupee to strengthen in the coming weeks.
“There is very little impact on India and Indian rupee in terms of capital outflows because export numbers have been good so far,” added Subramanian.
The US Federal Reserve on Wednesday increased its benchmark interest rate a quarter point amid rising confidence that the economy is on the path of robust growth.
It for the second time in three months that the Fed has increased its interest rates, which is widely anticipated by the financial markets as it has taken the overnight funds rate to a target range of 0.75 percent to one percent and set the Fed on a likely path of regular hikes ahead.
(With agency inputs)