Chief Economic Advisor Subramanian steps down, to return to academia

New Delhi: Chief Economic Advisor (CEA) K V Subramanian will be leaving the finance ministry and returning to academia on completion of his three-year term.

The government had appointed Subramanian, an ISB Hyderabad professor, as the CEA in December 2018. He had succeeded Arvind Subramanian, who quit the position close to a year ahead of his extended tenure.

Subramanian's three-year term would have come up for renewal in December but he decided to return to academia.

Prime Minister Narendra Modi in a tweet wished him the very best for his future endeavours, saying, "Its been a delight to work with @SubramanianKri. His academic brilliance, unique perspectives on key economic as well as policy matters and reformist zeal are noteworthy."

The government will have to look for a new person for the crucial post at a time when the economy is coming out of the pandemic-induced decline.

Another important task before the new CEA would be to prepare the Economic Survey to be tabled in Parliament on the last working day of January.

Subramanian's projection that the economy will stage a V-shaped recovery after registering a sharp decline in 2020-21 on account of the impact of COVID-19 pandemic is proving to be correct. According to Reserve Bank estimates, the GDP is likely to register a growth rate of 9.5 per cent during the current financial year.

The Economic Survey 2020-21 authored by him had projected GDP growth of 11 per cent during the current financial year ending March 2022.

In a statement, K V Subramanian thanked the Prime Minister as well as Finance Minister Nirmala Sitharaman for their support and inspiring leadership.

"I have decided to return back to academia following the completion of my 3-year fulfilling tenure as the Chief Economic Adviser, Government of India," he said.

Subramanian, who authored three Economic Surveys, said, "In close to three decades of my professional life, I am yet to encounter a more inspiring leader than the Hon'ble Prime Minister, Shri Narendra Modiji. His intuitive understanding of economic policy combines with an unmistakeable determination to use the same to elevate the lives of common citizens."

The momentous change in India's economic thinking post the pandemic - inter alia embracing ethical wealth creation by empowering the private sector and economic recovery driven by government capital expenditure - bears testimony to his leadership, he said.

Considered as one of the youngest CEAs, he said given the passion for research, bringing new ideas and disseminating them through the Economic Survey has been an unadulterated pleasure.

"This process has taught me to carefully pick a team of talented and motivated professionals in a way that Sourav Ganguly exemplified, remaining calm while continually paddling underneath as (M S) Dhoni epitomised, and always putting the nation first in a way that Rahul Dravid demonstrated.

"The way my incredibly committed and capable team of Indian Economic Service officers responded to the responsibility and the freedom entrusted to them - a sine qua non for a creative team - has been so wonderful to observe," he said.

Thanking the finance minister, he said she has been instrumental in the Economic Surveys carrying their free spirit.

"Her feedback has been as committed as her support. Whether it was in taking the draft chapters to read on a cross-country flight or in suggesting changes that better incorporated India's institutional features, these are but two examples of her commitment and support," he said.

Former CEA Arvind Subramanian was the second key economic policy adviser in the Modi government to quit the job mid-way to return to the US. Previously, the then NITI Aayog vice chairman Arvind Panagariya had stepped down in August 2017, nearly two years before his term was to end.

Incidently, both were handpicked after the BJP government came to power in May 2014 and cited personal reasons for quitting ahead of tenure.

K V Subramanian, 50, obtained his MBA and PhD in financial economics from the University of Chicago Booth School of Business, under the advice of Professor Luigi Zingales and Professor Raghuram Rajan, former RBI Governor.

In previous academic roles, Subramanian served on the finance faculty at Goizueta Business School at Emory University in the US.

Before beginning his academic career, Subramanian worked as a consultant with JPMorgan Chase in New York. He also served in a management role in the elite derivatives research group at ICICI Ltd, which at the time was India's top project financing institution.