PMEAC admits to slowdown, lists out 10 priority areas

PM Modi's Economic advisory council to meet for first time today

The first meeting of the newly constituted Economic Advisory Council to the Prime Minister (EAC-PM) will be held on Wednesday and is likely to discuss avenues to boost economic growth and accelerate employment generation in the country.

The EAC-PM chairman said, "We have identified 10 themes that we would initially work on till we have our next meeting one month from now".

The Council will structure its report around 10 themes (see chart) in the coming months. The other focus areas are monetary policy, public spending, agriculture and animal husbandry, institutions of economic governance, patterns of consumption and production and the social sector.

After its first meeting, the Council arrived at a broad consensus about the slowdown but also said there were green shoots, which would be visible in the months to come.

Others members in the group include economists Surjit Bhalla, Rathin Roy and Ashima Goyal (part-time members).

The council will also analyse and advise the Prime Minister on any issue, economic or otherwise, referred by him.

Debroy said there was a consensus amongst the members of the PMEAC that the economy had slowed down but declined to comment whether demonetisation or GST were the reasons behind it.

The Council has been set up with the approval of the prime minister on September 26, 2017. Progress on these ten topics will be appraised when the EAC-PM formally meets again in November.

The Council wants the Modi government to stick to its fiscal consolidation road map and has suggested that a stimulus to the industry should not be at the cost of fiscal prudence.

"The deliberations of the new Economic Advisory Council to the Prime Minister also reflect its value addition as an independent institutional mechanism to provide informed advice to the Prime Minister on addressing issues of macroeconomic importance related aspects".

Debroy, as the head of the five-member panel, chaired the EAC meeting, with the government's Chief Economic Advisor Arvind Subramanian making a presentation. "The World Bank's growth projections are 65 per cent wrong", he said when asked to comment on lowering of growth projections by worldwide multilateral lending agencies.

Earlier this week, the International Monetary Fund had lowered India's growth forecast for the current fiscal by 0.5 percentage points to 6.7 per cent, while the World Bank pegged economic expansion at 7 per cent, down from 7.2 per cent projected earlier.

The majority view in the government is not inclined towards relaxing its fiscal deficit target of 3.2% of gross domestic product for the current financial year.

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