Skip to main content

PM forms Economic Advisory Council, Debroy will be chief

PM forms Economic Advisory Council, Debroy will be chief
Prime Minister Narendra Modi on Monday constituted a fivemember Economic Advisory Council (EAC) headed by Niti Aayog member Bibek Debroy, at a time when concerns are being raised over the declining growth in India.

The EAC also includes NITI Aayog’s Principal Advisor Ratan Watal as its member secretary. Economist Surjit Bhalla, National Institute of Public Finance and Policy director Rathin Roy and Indira Gandhi Institute of Development Research professor Ashima Goyal will be part time members of the Council.

“Addressing issues of macroeconomic importance and presenting views thereon to the Prime Minister.”

“This could be either suo-motu or on reference from the Prime Minister or anyone else. The five-member council consists of economists of high repute and eminence,” according to an official statement.

In the previous UPA government when Manmohan Singh was the Prime Minister, EAC was headed by former RBI Governor C Rangarajan. But, it was made defunct since then. The terms of reference of the EAC will be to analyse any issue, economic or otherwise, referred to it by the Prime Minister and advising him thereon. It will also address issues of macroeconomic importance and present its views to the PM. “This could be either suo-motu or on reference from the PM or anyone else.”

The terms of reference also includes attending to any other task as may be desired by the Prime Minister from time-to-time.

Last week, Finance Minister Arun Jaitley held a brainstorming meeting with senior officials from various ministries to find ways to boost growth and create jobs.The meeting, which lasted about two hours, was also attended by Commerce Minister Suresh Prabhu, Railway Minister Piyush Goyal and secretaries of various Finance Ministry departments.

Since 2016, GDP growth has fallen for six consecutive quarters, dipping to three-year low of 5.7 per cent in the April-June quarter with India losing the fastest growing economy tag to China for the second straight quarter. Both wholesale and retail inflation rose in August. Besides the falling GDP growth rate, exports are facing strong headwinds and industrial growth is the lowest in five years. The current account deficit — the difference between inflow and outflow of foreign exchange — has risen to 2.4 per cent of GDP in April June. The government is also expected to soon address structural problems facing the economy as well as transient issues with the implementation of GST. It was expected that GST will boost growth by up to 2 percentage points, but technical glitches created a scare of revenues falling short of expectations.

The Mint, New Delhi, 26th September 2017

Comments

Popular posts from this blog

At 18%, GST Rate to be Less Taxing for Most Goods

About 70% of all goods and some consumer durables likely to cost less

A number of goods such as cosmetics, shaving creams, shampoo, toothpaste, soap, plastics, paints and some consumer durables could become cheaper under the proposed goods and services tax (GST) regime as most items are likely to be subject to the rate of 18% rather than the higher one of 28%.

India is likely to rely on the effective tax rate currently applicable on a commodity to get a fix on the GST slab, said a government official, allowing most goods to make it to the lower bracket.

For instance, if an item comes within the 12% excise slab but the effective tax is 8% due to abatement, then the latter will be considered for GST fitment.

Going by this formulation, about 70% of all goods could fall in the 18% bracket.

The GST Council has finalised a four-tier tax structure of 5%, 12%, 18% and 28% but has left room for the highest slab to be pegged at 40%. A committee of officials will work out the fitment and the council…

Firms with sales below Rs.50 crore out of ambit

The tax department has reiterated that the PoEM rules, which require foreign firms to pay taxes in India if the effective control is here, will not apply to companies withaturnover of Rs.50 crore or less inafinancial year. Last month, the tax department had come out with the longawaited Place of Effective Management (PoEM) rules, which require foreign companies in India and Indian firms with overseas subsidiaries to pay local taxes if their businesses are effectively controlled by Indians. Then the rules did not setathreshold above which they were to apply. However, the accompanying press release states that the rules will not apply to companies withaturnover of up to Rs.50 crore inayear. That created confusion whether the threshold will be adhered to. Inacircular to clarify things, the Central Board of Direct Taxes (CBDT) said the provision "shall not apply toacompany havingaturnover or gross receipts of ~50 crore or less inafinancial year".

PoEM rules essentially target shell …