The government Wednesday reconstituted the Economic Advisory Council to the Prime Minister (EAC-PM) under existing Chairman Bibek Debroy, for a period of two years.
While Ashima Goel of Indira Gandhi Institute of Development Research continues to be one of the two part-time members, Sajjid Chinoy, Chief India economist at J.P. Morgan, has been brought in as the new member in the Council. Ratan P Watal will continue as Member Secretary of the EAC-PM. The government has dropped economists Rathin Roy and Shamika Ravi as part time members of the Council.
Ravi, Director of Research at Brookings India, has been critical of government’s approach towards tackling the economic slowdown. “We are faced with a structural slowdown. Urgently need to follow a #NationalGrowthStrategy with time bound goals for many ministries. Need major reforms, not mere tinkering. Leaving economy to the finance ministry is like leaving the growth of a firm to its accounts department,” Ravi said in a tweet on August 22. India’s GDP growth fell to a 25-quarter low of 5 per cent in April-June quarter.
Last week, the Centre announced a major structural reform by cutting corporate tax rate to 22 per cent from 30 per cent — costing a total of Rs 1.45 lakh crore annually — to address the slowdown and to promote private investment in the economy. She also questioned Centre’s latest move to ban e-cigarettes. “Why ban when you can tax (heavily)? Banning #ecigarettes while keeping tobacco products is bizarre. Neither health nor fiscal grounds for this decision, so what’s the logic?,” Ravi said in a tweet on September 18.
Roy, Director at National Institute of Public Finance and Policy, has also been vocal about the slowdown facing the Indian economy for many months, and argued the need for pushing structural reforms instead of fiscal stimulus.
“Muddled macro, asserting slowdown cyclical then arguing for sector, admin reforms, relative price distortion fixes — all measures to fix structural problems. Easy macro policy absent structural change can temporarily boost growth. That’s not countercyclical. That’s populist,” he said in a tweet on August 21.
The EAC-PM advises Prime Minister Narendra Modi on macroeconomic issues and other matters referred to it by Modi. So far it has not made its suggestions made to PM on economic matters public. The Council submitted papers on issues including employment, macroeconomic situation and growth to the Prime Minister’s Office.