P Chidambaram criticises Economic Survey: ‘Looking through rearview mirror rather than windshield’

The Economic Survey and the Economics Division, the Congress leader said, should have taken a view from outside the government. “For all said and done, Arvind Subramanian did that. He stepped aside and looked at the economy. But this Economic Survey seems to be a very departmental point of view. It does not take an objective view of the economy,” said Chidambaram.

For instance, said the Congress leader, the Survey, after looking at the rearview mirror for 20-odd pages, talks about the fact that the impact of monetary tightening is beginning to show in slowing economic activity and factors such as prolonged strains in supply chains, heightened uncertainty due to geopolitical conflict, slower growth in economic output, damper trade growth, risks to the current account balance, unfavourable developments in the current account balance, plateauing export growth, slackening global demand, depreciation pressure on the currency, entrenched inflation, and borrowing costs remaining high.

“You have put all the negative factors that are ahead of you in two paragraphs running to about 17 lines but then what are you saying about how the government according to you should deal with these problems? This is my criticism of the Economic Survey. It is entirely through your rearview mirror, you compress all the possible negatives in two paragraphs and then don’t advise the government what are the options available for you to deal with them,” said the former Union minister.

“This is a very departmental point of view,” he went on to say. Arguing that Subramanian had made a good beginning by stepping aside and looking at the government’s performance on the outlook, Chidambaram said, “You can objectively say these are the things that need to be done. I don’t find anywhere in the Economic Survey what should be done to counteract the negative factors … That is the problem with this survey.”

On the growth projection, he said while the Survey has quoted the International Monetary Fund’s (IMF) growth forecast for the year, it has not talked about the projections of the Organisation for Economic Co-operation and Development (OECD) and the United Nations (UN).

“If trade growth is going to be 1 per cent, which he (Chief Economic Advisor V Anantha Nageswaran) acknowledges, and the world economy is going to grow at two per cent or less it will surely have an impact on India. Either you say it won’t have an impact or you say it will have an impact and then suggest what corrective measures can be taken. He is neither saying it won’t have an impact nor does he admit it will have an impact and suggest corrective measures. That is why I am a little disappointed that he is not taking a view by stepping outside the government or looking at the economy. He is still from a very departmental point of view,” said Chidambaram.

The Congress leader said the government should be wary of the fact that the world economy will slow down.

“Few things are clear to me like the writing on the wall. The world economy will slow down, major advanced economies will go into a recession and the security situation in the world will worsen. Neither (Vladimir) Putin nor Xi (Jinping) seem to be pulling back or pausing. In fact, the Russia-Ukraine war in the last 10 days has intensified. And China is certainly egging Russia on the one hand and from what we have seen from the papers presented at the DGP-IGP conference it clearly shows all the security officials in the police system seem to think that China is aggressively pushing its agenda. So, whatever the reasons, three things are clear. The world economy will slow down, major economies will go into a recession, and the security situation will worsen in 2023-’24. Now, given these three almost certain events, you (the CEA) should advise the government on how do you minimise the impact of these events and how do you take countermeasures. That is not there,” said Chidambaram.