12 Jul 2019

Policy Uncertainty v/s Investment

Source: Economic Survey 2018-19

How does Policy Uncertainty affect Investment?

    • Significant reduction in Economic Policy Uncertainty in India over the last one decade, even when economic policy uncertainty increased in major countries, especially the U.S.
    • Uncertainty dampens investment growth in India for about five quarters.
    • Lower economic policy uncertainty can foster a salutary investment climate.
  • Survey proposes reduction in economic policy uncertainty by way of:
    • Consistency of actual policy with forward guidance.
    • Quality assurance certification of processes in Government departments