Economic slowdown a concern, need to push growth, jobs: PM Narendra Modi’s advisors

Bibek Debroy said the Council will work in consultation with various stakeholders, including sectoral ministries, states, experts, institutions, regulators and the private sector.

By: ENS Economic Bureau | New Delhi | Updated: October 12, 2017 8:58 am
 Economic Advisory Council, Jobs, Economic slowdown, Indian economy, EAC-PM meeting, Bibek Debroy, Economy Track Monitor, India news, Indian Express Bibek Debroy, Chairman, Economic Advisory Council to the Prime Minister (EAC-PM) with members during a press conference in New Delhi on Wednesday. (PTI Photo)

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.

The Council also recognised the need for instituting an Economy Track Monitor, using lead indicators and triggers for action, based on informed assessment and analysis.

“There is a consensus among us about the various reasons that have caused the slowdown” and the Council will provide specific recommendations that can be implemented in the near term, its chairman Bibek Debroy said after the meeting.

There is a lot of concern about the economy today and the Council will “work as a sounding board of ideas”, EAC member Ashima Goyal said.

The EAC identified ten themes on which reports will be prepared: economic growth; employment and job creation; informal sector and integration; fiscal framework; monetary policy; public expenditure; institutions of economic governance; agriculture & animal husbandry; and, patterns of consumption & production and social sector.

The other members on the committee include Surjit Bhalla and Rathin Roy, along with Ratan Watal, principal advisor, Niti Aayog, as member secretary.

Debroy said the Council will work in consultation with various stakeholders, including sectoral ministries, states, experts, institutions, regulators and the private sector.

Chief Economic Advisor Arvind Subramanian made a presenstation to the Council and focused attention on accelerating economic growth, including investments and exports-using a combination of different policy levers. EAC member Rathin Roy said that “the consensus is there is economic slowdown, we will examine its causes”.

Asked whether Prime Minister Narendra Modi has referred any specific issues out of these ten to the Council to advise on, Debroy said: “There are issues which the Prime Minister has already referred to us but we will not tell you what those issues are.” While constituting the EAC last month, the government said the Council can up issues “either suo-motu or on reference from the Prime Minister or anyone else”.

To a query on job losses in the economy post demonetisation and implementation of the Goods and Services Tax (GST), Debroy said this “issue was not examined in today’s meeting.” He also alluded to the lack of adequate employment data to make any conclusive assessment of the job scenario in the country. “Whether we like it or not, we don’t have good data on employment and jobs,” he said.

The constitution of the EAC-PM came in the backdrop of growing concerns over the pace of growth in the economy and the slow pace of job creation. In the quarter April to June 2017, the GDP growth fell to 5.7 per cent from 7.9 per cent in the corresponding period last year. The reduction in growth came despite the government stepping up expenditure in the initial months.

The Council wants the government to stick to its fiscal consolidation road map and has suggested that stimulus to the industry should not be at the cost of fiscal prudence. When asked whether the government can breach fiscal deficit to provide stimulus to the industry, Debroy said, “There is a consensus (among the members)… that the fiscal consolidation exercise should not be deviated.” The government pegged the fiscal deficit target at 3.2 per cent for the current fiscal and 3 per cent for the next financial year.

“The deliberations of the new EAC-PM also reflect its value addition as an independent institutional mechanism, to provide informed advice to the Prime Minister on addressing issues of macroeconomic importance and related aspects…The Council views its role as also being a catalyst for action, by both developing and enabling action recommendations through different stakeholders,” the Council said in a press statement.

The Council will have another formal meeting in November. “Today, it was the first formal meeting. We will also have smaller meetings with stakeholders…We will also have another formal meeting next month and give recommendations to the prime minister,” Debroy said.

In 2014, the NDA government had disbanded the PMEAC which was earlier headed by former Reserve Bank of India governor C Rangarajan. The Economic Advisory Council to the Prime Minister was first constituted by the then prime minister Manmohan Singh on December 29, 2004, under the chairmanship of C Rangarajan. The work of the council included offering advice to the Prime Minister on policy matters from time to time. Besides, it also prepared a monthly report on economic developments at home and abroad for the Prime Minister.

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  1. S
    Srinivas
    Oct 12, 2017 at 5:31 pm
    First there were NO SANE Advisors on DeMo, then SOME INSANE Advisors were roped in for GST and now Advisors' Advisors........ ing soon - "Super Advisors to all Advisors' Advisors"......Do-Undo-Do-Undo-Do-Undo...... until 2019 !
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      ATWOZ
      Oct 12, 2017 at 1:46 pm
      Dear Advisors to our Belowwwweed PM (Pun intended VV). Give a very simple advise to our PM, appoint Mr J.S. as our FM removing Jai tely and see the turnaround in a year from turnover of 50K to 80Cr, He can help the country from all economic downturn with his business acumen. See the credibility of this gentlemen he had a turnover of 50K and still received unsecured loan from distance party in Crores whom he or his family OFCOURSE NEVER met (neither in there dreams) and THEY had pure business relationship. No doubt many state demonetization was a brush to change black money to white. Jai Hind.
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      1. R
        Rajeev
        Oct 12, 2017 at 1:10 pm
        Mr. Debroy Whatever you do it is not going to work now but also admire you. Please notet Plane is already Air Borne and the real problems lies elsewhere in creating Faith in the system which already gone . The Government and their Minister have proven to be incompetent and disaster in the business. The Solution now lies only with the Change of the Government in 2019 and hoping that the new Finance Minister/ PM is going to be some one who understand this country with the basics of business
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        1. Rajesh Shukla
          Oct 12, 2017 at 12:11 pm
          Let PM do not keep blind face and glorify the un-reality. We are still at the bottom on the index of ease doing business, still no clarity on GST documentations, enough corruption on each Govern department at all levels ........ Unless timely action on all these, the situation be slip from bad to worse.
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            Anmol
            Oct 12, 2017 at 1:06 pm
            There is ease of doing business, look at Mr. Jay Amit Shah. His turnover increased from 50 K to 80 Crore in 8 straight months. He could arrange credit of 25 Crore in no time. During UPA regime of 10 years, his business was going nowhere, look how turned around happened under BJP rule. It is just the anti-national who are making noise about job loss, growth rate and ease of doing business.
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          2. N
            nadir
            Oct 12, 2017 at 12:10 pm
            now they admit there is slowdown and they have consensus on the reasons for same. can they declare openly the reasons? is demonetization one of them ?(everybody knows it should be) do they hv guts? if not then nothing to expect as they are just for cover up
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