Index and labels: How Economic Survey plans to bring certainty in policy

The Survey stated that while India had secularly decreased domestic economic policy uncertainty since 2012 and had been exceptional in reducing this uncertainty since 2015

The Economic Survey 2018-19 made a case for reducing what it calls ‘economic policy uncertainty’ in India, by making policy and rules more predictable and stable, properly documenting the implementation of policy, and following an ‘economic policy uncertainty index’.

However, the above-mentioned index seems somewhat problematic.

“While economic uncertainty stemming from uncontrollable factors remains beyond the control of policymakers, they can control economic policy uncertainty. Reducing economic policy uncertainty is critical because both domestic investment and foreign investment are strongly deterred by increases in domestic economic policy uncertainty,” said the Survey in the chapter titled How Does Policy Uncertainty Affect