Economic Advisory Council Identifies Cause Of Slowdown, Formulates 10 Priorities


THE ECONOMIC Advisory Council to the Prime Minister (EAC-PM) in its first meeting Wednesday stressed on the need to "accelerate economic growth and employment over the next six months" and identified 10 areas on which it will prepare reports and make recommendations to the government over the next few months.

At its first meeting, the Council reached a consensus on the reasons behind the slowdown in economic growth.

At the meeting held at the NITI Aayog, it was also chose to work on the monetary policy and fiscal framework in consultation with the Reserve Bank of India. The five member committee comprising of reputed economists and experts was constituted by the Prime Minister last month to halt the downhill movement of the Indian economy.

Briefing reporters after the meeting, chairperson Bibek Debroy said the PMEAC would assist in monitoring public spending and had recommended job creation as the biggest priority.

Member Secretary Mr Ratan P Watal, former Finance Secretary and Principal Adviser at NITI Aayog were also present and the Council took stock of the current economic, fiscal and monetary policy environment and identified key issues that it would focus on. "Our views on the 10 identified areas would be of specific things that you can change tomorrow", Debroy said. The GDP growth fell to a three-year low of 5.7 per cent during the first quarter of the current fiscal. He made it clear that while consultations with the finance and various other ministries and departments will be done, the council won't push its recommendations to be included in the Budget, as that is not its job.

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To a query on job losses in the wake of demonetisation and implementation of the Goods and Services Tax (GST), Debroy said, "This issue was not examined in today's meeting".

In a recent interview to Reuters, Niti Aayog vice-chairman Rajiv Kumar, however, had favoured offering extra stimulus by breaching the fiscal deficit target (3.2% of GDP for FY18), if required, to create space for more capital spending.

He said the council is focused on critical interventions related to accelerating economic growth and employment, with greater social and financial inclusion, based on rigorous economic analysis.

In a bid to allay fears on slowing economic growth, the Council also dismissed lowering of India's growth projections by the International Monetary Fund (IMF) and the World Bank.

Roy, however, claimed: "IMF's growth projections are 80 per cent wrong". They would also come out with specific issue papers to address key concerns.