For the first time, a positive phenomenon of the Indian economy has been highlighted by Chief Economic Adviser K V Subramanian. Today, he opined that  India is likely to post a current account surplus in the current financial year(2020-21).

This, he reasoned, was rooted in moderation in import due to the under heating of the economy triggered by the COVID-19 crisis.

"This crisis is different from what the world witnessed during the taper tantrum, Subramanian said while addressing a virtual conference organised by industry body CII.

In fact, Taper tantrum phenomenon refers to the 2013 collective reactionary response that triggered a spike in US treasury yields, after investors learned that the US Fed was slowly putting brakes on its quantitative easing (QE) program. This led to a surge in inflation to high double digits emerging economies.

In contrast,  Subramanian ,thinks, the COVID crisis is different and India identified the nature of this crisis and treated it differently from other economic crises of the past.

Noting that COVID  is a crisis to demand and primarily a negative shock to demand, Subramanian said, "{India's response was suitably crafted to deal with that."

"And that is in fact if you can see is reflected in the fact that this year we may be having a current account surplus. We had almost USD 20 billion current account surplus in Q1... USD 19.8 billion to be precise. Even if let's say subsequent quarters do not see that kind of performance, we still will likely have a current account surplus...," he is quoted having said in a PTI report.. 

must read