US-based economist of Indian origin Arvind Subramanian has been named the chief economic adviser, a post that was lying vacant since Raghuram Rajan vacated it to become Reserve Bank of India governor on October 1 last year.
In end-June, Arvind Subramanian published a ‘provisional scorecard’ for the Narendra Modi government on the Peterson Institute?s website: Three As and one A(-) for steps by the government to curb grain and vegetable prices, ease labour laws and hike rail fares. But some measures did not fare that well:
Govt Measure: Imposing minimum export price (MEP) for vegetables
Grade: B
Explanation: More basic reforms are needed but given the potential threat from inflation, this is not unreasonable
Govt Measure: Extending forbearance on non-performing loans of corporate sector
Grade: B-
Explanation: The measure … has ambiguous effects. While it gives more time to address the problem of weak balance sheets … it delays and even fudges the real adjustment that corporates have to make
Govt Measure: Extending excise concessions for the automobile sector
Grade: C
Explanation: Special handouts to select sectors are problematic
Govt Measure: Hiking sugar subsidies and imposing import duty
Grade: D
Explanation: Aimed at appeasing sugar lobby in Maharashtra and Uttar Pradesh, it is problematic. … leads to water-intensive and water-wasting resource allocation