Chief Economic Advisor

The Chief Economic Adviser is a post in the Government of India which could be considered equivalent to the rank of Secretary of the Government of India. The CEA is head of Economic Division of the Department of Economic Affairs (DEA), Ministry of Finance, Government of India. The CEA is either selected from the inside of government (normally among the senior IAS officers) or from the outside, like some professors of economics. His office examines domestic and international economic trends. It undertakes research studies which focuses on economic policies and management of the economy. Based on the research and the conclusions, it provides advice to the Government of India.

CEA under the Modi Government:

Under the rule of Modi Government, so far, we have seen the working of two economists as the CEA of India.

Arvind Subramanian

Arvind Subramanian took up the tough post of CEA in October 2014. A graduate from St. Stephen's and an ex-Harvard faculty, he joined the Modi government to much gusto and accolades.

In his role as the CEA, Subramanian was responsible for bringing out the annual Economic Survey of India, traditionally released prior to the presentation of the union budget in the Indian parliament. His many contributions to India’s economy ranged from conceptualising JAM (Jan Dhan, Aadhar, Mobile) database to his four widely appreciated “Economic Surveys” that he produced during his four-year tenure, which was also a time that saw some major structural changes in the economy such as the demonetisation, the introduction of the goods and services tax, and the Insolvency and Bankruptcy Code 2016. These documents have not only become a must-read for policymakers, economists and other intellectuals, but also for the common man interested in the country’s economy. His inputs to make GST a reality — arguably India’s biggest indirect tax reform, which included his report on the Revenue Neutral Rate, was of great use in forging a consensus which led to the constitution amendment enabling the Goods and Services Tax. “He participated in every meeting of GST, gave his independent views and was heard in rapt attention by almost every Finance Minister,” said Arun Jaitley on a Facebook post. Further he stated, “His early diagnosis of the twin balance-sheet had led us to adopt the macro-economic strategy of higher public investment in the Budget of 2015-16. He came out with newer ideas, policy reforms in the sectors of clothing, fertilizers, kerosene, power and pulses,”. Subramanian contributed to the debate of federalism by conceptualising that the Indian federalism has not merely to be cooperative but also competitive. It is said that he thought ahead of time and, therefore, came out with such futuristic ideas on rationalisation of removal of “subsidies for the rich”, universal basic income and climate change.He further conducted the first online course on Indian economy on the education platform “Swayam” — which became one of the most followed courses in India. He built up a strong team of both “insiders” and “outsiders” in the Economic Division of the Ministry. On 20 June 2018, finance minister Arun Jaitley announced that owing to family commitments, Subramanian had to step down before the scheduled end of his tenure to return to academia in the US.

Krishnamurthy Subramanian

After Arvind Subramanian left the post, it remained vacant for about 6 months. On 7 December 2018, Krishnamurthy Subramanian was appointed as CEA to the Indian government. He is an alumnus of IIT, Kanpur where he studied Electrical Engineering, as well as of the IIM, Calcutta, where he was awarded an Ewing Marion Kauffman Foundation Dissertation Fellowship in 2005. He holds an MBA and a PhD in financial economics from University of Chicago - Booth School of Business. His PhD was completed under the supervision of Luigi Zingales and Raghuram Rajan. He has worked in expert committees for Securities and Exchange Board of India and the Reserve Bank of India, being part of major economic and corporate reforms in India. He has worked with JPMC, ICICI Bank and Tata Consultancy Services. He was a board member in the National Institute of Bank Management and the Reserve Bank of India Academy, and has academically been a part of the finance faculty at Goizueta Business School at Emory University in the USA. He is also currently a tenured Professor at the Indian School of Business, and earlier worked as an executive assistant to the chairperson of the Fixed Income Money Markets and Derivatives Association of India.

In the articles published in The Times of India and Livemint titled, "Will Black Be Back? Why demonetisation will be revolutionary in India’s fight against corruption", and "Demonetisation: Are the poor really suffering?", respectively, Subramanian supported the Indian Government's banknote demonetisation policy in 2016. Subramanian was inducted into the Fifteenth Finance Commission's advisory council in May 2019. In his ongoing term he has present an economic survey in which it’s very evident that he is a staunch believer of China's growth model driven by investments and exports. The document borrowed heavily from the Chinese playbook and emphasised on a virtuous cycle of growth driven by an investment push. The document laid the blueprint for Modi govt's $5 trillion GDP goal by 2024-25.

Although it is yet to be seen how Mr. Krishnamurthy would contribute the government in coping the current financial crisis caused by Covid-19 and how he would present the situation and required reforms in this year’s Economic Survey.

In recent times, there have been a few controversies for the role that CEA, who is supposed to work independently for the betterment of the national economy:

• Blame Game: Each government blames CEA of the previous government to produce overestimated data for GDP and Growth. Eg. being Recent controversies over the politicisation of India’s GDP data.

• Selection Procedure: The government constitutes a separate search committee to look for CEA. However, being headed by Prime Minister, he gives the final approval for the appointment of the CEA. Earlier selection was done from UPSC.

• Selecting those economists who support the government. Eg. Current CEA Supported government on Demonetization.
  

There also co-exists the need and importance of the CEA:

• Open Selection: Candidates from private and public academic or Financial Institution are also eligible to apply for the post.

• Selection is based on academic record and talent.

• The advice given by CEA is considered by the government and has been implemented in its economic policies or acts. Eg. SARFAESI Act, IBC Act, etc.
  

which makes it so unique with regard to other government posts.

Overall, the nation expects and requires that the office of CEA should be used for its true purpose with transparency and without being it politicized for the short-term political gains.