The main political leaders must guarantee predictable political actions: Economic study
New Delhi, July 4 () The government should ensure that policy measures are predictable and provide guidance to control the uncertainty of economic policy, which greatly influences both domestic and foreign investments in the country, according to the Economic Survey for 2018-19. .
The document, presented by Finance Minister Nirmala Sitharaman at the Rajya Sabha on Thursday, declared
that those responsible for formulating policies at the highest level should monitor the uncertainty index of economic policy on a quarterly basis.
First, high-level policy makers must ensure that their political actions are predictable, provide forward guidance on the policy stance, maintain broad coherence in real policy with forward direction, and reduce ambiguity and arbitrariness in policy. the implementation of the policy, said the survey.
To ensure predictability, the horizon over which policies will not be changed must be mandatorily specified so that the investor can obtain assurance about the future security of the policy, he said.
Although this will generate some limitations in the formulation of policies, such voluntary linkage from the hands of policymakers has been carried out several times, as in the case of the Reserve Bank of India that formulates the monetary policy, he added.
The government should encourage the construction of uncertainty sub-indices of economic policy to capture the uncertainty derived from fiscal policy, fiscal policy, monetary policy, trade policy and banking policy, he said.
Monitoring these sub-indices would allow monitoring and controlling the uncertainty of economic policy, he added.
In addition, as organizations in the private sector compete and seek the highest level of quality certifications, government departments should also be mandated to look for quality certifications in a similar way, according to the survey.
This certification process will require staff training to follow quality control processes and significantly reduce the uncertainty of economic policy, he added.
The survey indicated that the uncertainty of economic policy peaked in India at the end of 2011 and the beginning of 2012; and since then it has been declining with intermittent increases in the middle.
The uncertainty of economic policy in the country approached global uncertainty until 2014, however, began to differ from early 2015 and seems to have completely decoupled in 2018, the survey said. In recent times, while the uncertainty of economic policy has increased around the world, including the US. UU., The United Kingdom and China, the uncertainty of India's economic policy has been decreasing, he added. MSS ANS ANS