P Chidambaram takes a dig at CEA Subramanian over current account surplus remark

In a series of tweets, Chidambaram questioned the situation of a possible surplus in the current account saying that “many economists have pointed out, a current account surplus means that India, a country that needs more capital, is investing its capital abroad!”

“Our policies should ensure that both exports and imports should grow smartly leaving a manageable current account deficit,” the veteran Congress leader wrote in a tweet.

CEA has confirmed my suspicion that India will end 2020-21 with a current account surplus

But I am puzzled by the tone of his remarks. Is the CEA celebrating a current account surplus?

— P. Chidambaram (@PChidambaram_IN) November 24, 2020

Subramanian on Monday while addressing a virtual conference organised by industry body CII had said that India is likely to post a current account surplus in the current financial year as there is moderation in import due to under heating of the economy triggered by the COVID-19 crisis and added that this crisis is different from what the world witnessed during the taper tantrum.

Taper tantrum phenomenon refers to the 2013 collective reactionary response that triggered a spike in US treasury yields, after investors learned that the US Fed was slowly putting brakes on its quantitative easing (QE) program. This led to a surge in inflation to high double digits emerging economies.