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