This is the second time an Economic Survey has been presented by a principal economic advisor, without a Chief Economic Advisor.
The earlier instance was in 2014, when it was prepared by Illa Patnaik, for the finance ministry headed by the late Arun Jaitely. The whole exercise had been delayed that year, with the Budget presented on July 10, after the previous CEA Raghuram Rajan’s term had vacated the post the previous September to head the Reserve Bank of India.
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It was only after a year–in October 2014–that Rajan’s successor in the finance ministry, Arvind Subramanian, took charge. Subramanian’s term had been extended in 2017 but he put down his papers in 2018, nearly a year before his term ended in 2019.
In a similar turn of events, this time too the principal economic advisor to the Finance Ministry, Sanjeev Sanyal, had to take the wheel because the CEA seat had lain empty during the crucial months before the Budget presentation.
The last CEA Krishnamurthy Subramanian, who had taken charge in 2018, had stepped down in October 2021 after the end of his term. His successor Dr V Anantha Nageswaran had not been finalised till a few days ago on January 28.
Sanyal’s economic survey comes across as a drab affair compared with the reports presented by predecessors such as Kaushik Basu, Raghuram Rajan and Arvind Subramanian. These assessments were considered great reads, insightful and lucid breakdowns of macro matters for economy watchers and the layman alike.
For example, Basu was known for putting academic charts as openers and adding an introduction. Rajan’s 2012-13 report had quoted prophecies of economist James Meade and litterateur VS Naipaul on Mauritius, and then had shown how they were proven wrong. Arvind Subramanian famously quoted Amitabh Bachchan: “Thoda drama hona chahiye, thoda tragedy, thoda comedy (There must be a little bit of drama, tragedy and comedy)”.
Perhaps it was because this exercise was particularly taxing, with all the uncertainty. “The theme of this Economic Survey… relates to the art and science of policymaking under conditions of extreme uncertainty,” wrote Sanyal, in the Preface to the Survey.
The firsts this year
This year’s report moves away from the “Waterfall” approach and takes the “Agile” approach, wrote Sanyal.
“The default mode of policy-making in India and most of the world has traditionally been to rely on a pre-determined “Waterfall” approach – an upfront analysis of the issue, detailed planning and finally meticulous implementation. This is the framework that underpins five-year plans and rigid urban master-plans. The problem is that the real world is a complex and unpredictable place buffeted by all kinds of random shocks and unintended consequences,” he wrote.
This approach has not improved outcomes, he suggested.
Therefore, this time, they have taken this different approach that centralises agility.
“This framework is based on feed-back loops, real-time monitoring of actual outcomes, flexible responses, safety-net buffers and so on. Planning matters in this framework but mostly for scenario analysis, identifying vulnerable sections, and understanding policy options rather than as a deterministic prediction of the flow of events. The last Economic Survey did briefly discuss this approach, but this time it is a central theme,” he wrote.
This year’s report also has only one volume with a separate volume for Statistical Appendix, as opposed to the earlier two volumes. “The two volume format did allow space for bringing in new ideas and themes but, at almost 900 pages, it was also becoming unwieldy,” wrote Sanyal.
