Score card: New CEA Arvind Subramanian red flags Narendra Modi govt

Written by ENS Economic Bureau | New Delhi | Updated: Oct 17 2014, 21:49pm hrs
Arvind SubramanianNew Chief Economic Adviser Arvind Subramanian speaks to the media after taking charge at North Block in New Delhi. (PTI)
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 Institutes 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