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Importance of Communications Policy

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June 27, 2017

Why in news?

The RBI Governor announced that members of the Monetary Policy Committee (MPC) had refused an invitation from the Ministry of Finance for a private briefing.

What is the issue?

  • What did the ministry want to share with the MPC which was not already available in the public domain? The answer probably is the official analysis of the data.
  • The fact of the matter is that there is no longer a robust communications policy.
  • Also, there is inadequate economic research emanating from official and institutional sources.
  • While the RBI’s detailed reports have become a pale version of what they used to be, the Finance Ministry’s Economic Survey has become an overly theoretical tract.

What is happening in recent times?

  • In recent years, with the world passing through a very uncertain economic period, communications policies and official publications have undergone a significant change.
  • Traditionally, the Survey has been a rich source of information for economic analysts and officials. However, in the past few years, the Survey has been lacking in direction.
  • The last Survey, released in January 2017, was more like a research-based conference volume with tentative propositions and hypotheses, but very little by way of a review of the Indian economy.
  • Also, the Annual Report of the RBI has been shrinking and silent on many pertinent issues of the economy such as non-performing assets.
  • The other statutory document, Report on Trends and Progress of Banking (RTPB) has became invisible, having been submerged into the Financial Stability Report (FSR).
  • Last year, the RTPB was finally separated from the FSR, but was a shadow of its traditional size and quality.
  • A similar story holds true for other research-based publications from the research wing of the RBI.
  • Centre for Advanced Financial Research and Learning (CAFRAL), was set up in 2011 to serve as a knowledge hub of the country.
  • However, research output from CAFRAL has not gained prominence and respectability in both quality and quantity despite hosting a large number of foreign-based economists.

Why communications policy is important?

  • The communication policy is expected to cover four broad categories of issues viz., interpretation of economic conditions including recent developments, content of policy decisions, strategy and outlook for the future.
  • Globally, in recent years, the communications policy of governments has assumed significance, as it promotes confidence in the policy regime.
  • The Indian economy is passing through a great transition.
  • Ever since the new government took over, there has been a paradigm shift in economic policy.
  • In such a transition, communications policy through publications seems worsening, when it should have been more transparent.
  • The uncertain and tense economic environment is not conducive to growth.

 

Source: Business Line

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