Economy-wide perspectives are important in assessing policy choices.

The Council has a tradition of providing

assessment of the Indian economy using macroeconomic models. Such analysis is supplemented by periodic
surveys of the business sector which track its expectations on output, prices, employment and investment.
Assessment of policies relating to taxes and subsidies, administered prices, exchange rate, capital flows, monetary
policy
and public spending in a framework that quantifies the impact of these factors on the aggregate output and price is
made available through commissioned studies, periodic reports and seminars. The Council has also begun to study
state level economies again after its initial involvement in this area in the 1970s.
The Council has three distinct empirical models of the Indian economy to address a range of issues.
A short-term macroeconomic model incorporating a Social Accounting Matrix (SAM) and a set of
behavioral equations such as investment, demand and trade has been used to provide short-term
forecasts and policy analysis.
A structural econometric model has been maintained to provide estimates of the key macroeconomic
parameters such as GDP, inflation rate, fiscal balance and external balance over a medium-term horizon.
One application of the econometric model has been to assess the feasibility of sustained high rates of
economic growth.
The third type of modelling capability that the Council maintains is that of analysing resource allocation
across the production sectors in the context of a global economy. What happens if India reduces its trade
barriers unilaterally? Or when such trade liberalisation takes place in a multi-lateral framework? What are
the implications of Free or Regional Trade Agreements? What are the implications of climate change in a
global context? These are the issues that can be examined in a Computable General Equilibrium (CGE)
modelling framework. The Council maintains a capability to examine the trade policy issues both in the
CGE framework as well as other approaches of partial equilibrium analysis.
A set of monthly and quarterly reports disseminate the macroeconomic perspectives from
Council's research. Macrotrack, a monthly journal that provides insights from analysis of issues
relating to agriculture, industry, trade, finance and the overall economy is now in its eighth year of
publication. Quarterly Review of the economy, a package of quarterly reports and seminars on the
economy is in operation for well over a decade. The quarterly reports comprise of a
comprehensive review of the economy and a report on the quarterly survey of business
expectations conducted by the Council. The Business Confidence Index constructed by the
Council is based on these quarterly surveys.
This analytical capability has been formed through active collaborations with the official agencies, scholars and
universities in India and abroad.