Krishnamurthy Subramanian | Economic Survey: Meet the man whose counsel matters the most on Budget eve


The office of the Chief Economic Advisor, though advisory in nature, publishes one of the most important documents just before the Budget that lays the groundwork for the government’s flagship document on its finances and policy statement.

The Economic Survey, divided into two volumes, presents not just a snapshot of the economy but also gives a glimpse of what is to come ahead. The Budget is presented in the backdrop of the Survey’s findings but doesn’t necessarily impact it.

India’s current Chief Economic Advisor, Krishnamurthy Subramanian, is a staunch believer of China’s growth model driven by investments and exports, a fact that can easily be gleaned from last year’s Economic Survey. The document borrowed heavily from the Chinese playbook and emphasised on a virtuous cycle of growth driven by an investment push. That document laid the blueprint for Modi govt’s $5 trillion GDP push.


Subramanian, who was appointed in December of 2018 after Arvind Subramanian left citing personal reasons in June of that year, will be the centre of attention today when he presents his second Economic Survey. This year’s survey comes at a time when the economy is in the throes of a downturn with real growth slipping to a decadal low and the nominal one to a 42-year low.

He holds a PhD from the University of Chicago Booth School of Business. His research in banking, law and finance, innovation and economic growth, and corporate governance has been published in the world’s leading journals, including The Review of Financial Studies, the Journal of Financial Economics, the Journal of Financial and Quantitative Analysis, and the Journal of Law and Economics.

Last year’s Survey talked of the road map to the $5 trillion GDP goal by 2024-25. It used China’s example to drive home the importance of focussing on investment-driven growth.

“China has relied primarily on savings and investment with consumption decreasing significantly as a share of GDP. China remains an investment-driven economy even today with its investment and savings rates reaching about 45% of GDP even in 2017,” the Survey read.

The counsel came at a time when consumption slowdown had taken root and was beginning to chip away at India’s GDP growth. The Survey predicted India to grow at 7 per cent in 2019-20. The first advance estimates published by the Central Statistics Office (CSO) put the figure at 5 per cent, 2 per cent less than what the Survey estimated. The Survey had pivoted the 7 per cent real growth around an investment-led push, but a look at the first advance estimates shows that the investment growth may have collapsed to just 1 per cent in the current fiscal from 10 per cent in the previous year.

All eyes today are on the Economic Survey and what ways the CEA suggests to the finance minister to stop India’s economy from slipping further.

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