Importance of Communications Policy

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