Interacting with reporters on Saturday, Jaitley said Subramanian would get a one-year extension.
The BJP-led NDA government's five-year term ends in May 2019.
Speaking after receiving the one-year extension
to his tenure, Subramanian said that he was well aware of the challenges that the Indian economy is currently facing, adding that he was "delighted to take on the challenge of the economy".
"I am delighted to take on the challenge of the economy. We know what the challenges are. We have to drive growth, investment, and exports. The government is working on multiple fronts," Subramanian told ANI.
Subramanian was appointed as the CEA
on October 16, 2014, for a term of three years.
He is on leave from the US-based Peterson Institute for International Economics, where he is a senior fellow.
Being the key advisor to Finance Minister Arun Jaitley, he has been instrumental in suggesting some key reforms.
The Economic Survey was for the first time split into two volumes – pre-Budget and post-Budget – for 2016-17.
The Survey, authored by the CEA, advocated a Universal Basic Income (UBI) scheme as an alternative poverty reduction mechanism in place of various ongoing social welfare programmes.
He pitched for a scheme to transfer a reasonable basic income to Indians below the poverty line based on a survey on misallocation of resources. The survey showed that districts, where needs are the greatest, are precisely those where state capacity is the weakest.
The survey's findings suggest that a more efficient way to help the poor would be to provide them resources directly, through a UBI, which is being debated in the political circles.
is usually the main go-to person for advice for the finance minister on macro-economic matters. The CEA's primary responsibilities, among others, include authoring the mid-year analysis and the Economic Survey.
Subramanian's predecessor was Raghuram Rajan, who quit the position in September 2013 after being appointed the Governor of the Reserve Bank of India.
Subramanian graduated from St Stephen's College, Delhi, and got an MBA from the Indian Institute of Management, Ahmedabad. He obtained M.Phil and D.Phil from the University of Oxford, UK.