The role of the CEA needs to be redefined by the finance minister

Successive govts have appointed excellent economists, not because they wanted their advice, but because someone has to prepare the Survey and maybe speak on behalf of the government as a spokesperson.

The Economic Survey is due soon. I could be mistaken, but this could be the first year since the Survey took on its current form -- with the exception of 2014-15 -- that it will be prepared without a Chief Economic Advisor (CEA), who traditionally prepares it.

So it seems like a good time to take a close look at the role of the CEA. Is one new at all?

The post was created in 1956 and its first occupant was JJ Anjaria. His job was to prepare a survey of the economy for Parliament. Until then the finance minister described the state of the economy to Parliament in a few paragraphs.

However, even from 1956 the Survey was still included in the Budget. It was only from 1964, as the economy became more complex, it was taken out of the Budget and presented separately before the Budget as the context for it.

In the 1980s, the then CEA, Bimal Jalan, enlarged it greatly. This enlargement has continued unabated since then. It has had consequences for the quality because no one has thought it necessary to subject the document to peer review for language and consistency before publication. That, in my view, is a terrible practice.

It has thus become a document of record of use primarily to economic historians. But even they don’t refer to it.

Not just that: because it is presented just a day or two before the Budget, it is largely forgotten after a day or two. It is very badly written and I cringe when I read it. It’s main (but not enormous) attraction now are the statistical tables which are published in a separate volume.

In 2010 the then CEA, in a fit of narcissism, began the practice of starting the Survey with his personal views. His first contribution was a theoretical essay on corruption and how to tackle it. Again, if I may say so, not peer reviewed, this time for content.

That practice has been discontinued now, thank god. The Survey is not the place for personal opinions, especially ones that have not been subject to the strictest academic scrutiny.

It pains me to say this because all CEAs over the last 40 years have been top class economists as well as friends. But alas the government has increasingly regarded them as unnecessary distractions, to put it most politely. There may have been one or two exceptions to this general tendency, but those depended on their personal relationship with the Finance Secretary.

I have, when the opportunity arose, asked three of the best economists the government ever had, all recruited in the 1950s, why this was so. In fact, one of them had been a highly celebrated CEA. The other two said they had declined the post when offered.

All said that though the title was grand, the job was not. Preparing a report for parliament, they said, did not deserve that grand title because it could be done — and they said this to me without irony — even by a good journalist.

Recognising this, successive governments have appointed excellent economists, not because they wanted their advice, but because someone has to prepare the Survey and maybe speak on behalf of the government as a spokesperson. But they have not relied on them and one finance minister even had other advisers because he lacked faith in his CEA.

So here’s the question: how should the role of the CEA be redefined? It would be nice if the finance minister devoted some time and thought to it because, as the post stands now, it serves no useful purpose. The job may as well be transferred to NITI Aayog.