Lost battle over use of oil windfall to fiscal hawks: Arvind Subramanian

Subramanian, who had often batted for policy rate rate reduction, said tighter monetary and fiscal policies were needed to hold the line at the time of shocks

Amid the demand for cut in taxes on fuel, outgoing chief economic advisor (CEA) Arvind Subramanian on Wednesday said oil windfall should have been used for stepping up public investment, an opinion which he felt did not find favour with fiscal puritans. 

“My own judgement is that we should have used the oil windfall for more public investment but I lost that battle to those who wanted fiscal consolidation,” Subramanian said at an event organised by the National Council of Applied Economic Research (NCAER). 

He said oil windfall is used for fiscal deficit reduction, enhancing public investment and executing the pay commission’s