8 Years Of Systemic Reforms Increased Macroeconomic Stability: RBI Member

Eight years of systemic economic reforms under the Modi government have increased India's macroeconomic stability and its capacity to withstand any external shocks, RBI Monetary Policy Committee (MPC) Member Ashima Goyal has said.

Ms Goyal further said appropriate countercyclical macroeconomic policy with continuing supply-side improvements has enabled a growth recovery that is among the best in the world.

"Just before the Modi government came in, the country was facing serious macroeconomic instability after the global financial crisis.

"After 8 years of systemic reforms, the economy has been able to ride out more severe global shocks with macroeconomic stability, a healthy financial sector, food security and a government and industry that have learnt to work together," she told PTI.

Prime Minister Narendra Modi assumed office on May 26, 2014. He was administered the oath of office for his second term on May 30, 2019.

On the credibility crisis of India's official numbers on a range of subjects, she said the criticisms are largely erroneous.

Ms Goyal, emeritus professor at the Indira Gandhi Institute of Development Research (IGIDR), said a major upgradation in GDP measurement towards international practices and use of online databases was attacked and temporary teething problems were blown-up.

"Today there is no dichotomy between high-frequency data and the GDP numbers," she said.

Experts recognize the fact that the Periodic Labour Force Survey (PLFS), although it is delayed, is much more reliable than the private Centre for Monitoring Indian Economy (CMIE) employment data, whose sampling is unrepresentative, she said.

According to Ms Goyal, some were upset that the more extensive 5-yearly unemployment surveys were being replaced by the high-frequency PLFS, but regular unemployment data is essential for macroeconomic policy.

Noting that there is resistance towards any change, Ms Goyal said improvement, resources, strength and regularity is required and is ongoing in India's statistical system.

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