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PM's Eco Council Lists 10 Areas to Push Growth

PM's Eco Council Lists 10 Areas to Push Growth
Advisory body identifies priorities, not in favour of relaxing fiscal goals

The recently reconstituted Economic Advisory Council to the Prime Minister (EAC-PM) has identified 10 priority areas for reviving growth and employment in the next six months such as jobs, monetary policy, public spending and agriculture.“The entire thrust of the council will be on giving specific implementable recommendations to the PM after consulting all stakeholder ministries,“ Bibek Debroy , cha irman of the council, said after its first meeting on Wednesday .

The 10 themes are economic growth; employment and job creation; informal sector and integration; fiscal framework; mone tary policy; public expenditure; institutions of economic governance; agriculture and animal husbandry; patterns of consumption; and production and social sector. From Page 1 Debroy said the council will draft suggestions on five of these at its next meeting in November, keeping in mind the Union Budget.However, the council is not in favour of relaxing fiscal goals to boost the economy.

“There is a consensus (among the members)... that the fiscal consolidation exercise should not be deviated,“ Debroy told reporters. The government has pledged to rein in the fiscal deficit at 3.2% of GDP in the year to March.

Experts are divided over using a stimulus programme to lift growth, which slumped to a threeyear low in the June quarter, prompting the Reserve Bank of India and international agencies to lower their growth estimates for FY18. The government reconstituted the council last month after the slowdown and criticism of its handling of the economy .

Niti Aayog vice-chairman Rajiv Kumar has said that the situation warrants a fiscal stimulus.The five-member council acknowledged the slowdown in the Indian economy and said that it will examine the causes, which could be many. One of the council members, Rathin Roy, rejected the growth projections of the IMF and the World Bank.

“There is consensus among us about the reasons for a slowdown in growth rates,“ Debroy said.The International Monetary Fund (IMF) had on Tuesday pared India's growth forecast to 6.7% for FY18 from 7.2% estimated earlier. Economist Roy , one of the three part-time members of the council, said 90% of the IMF's projections turn out to be incorrect and 65% of the World Bank's estimates are off the mark. “They have a global model and most of the time their projections are wrong,“ Roy said.

Chief economic adviser Arvind Subramanian gave a detailed presentation to the council on possible ways of boosting growth such as investments and exports besides policy changes.Commenting on the uncertain jobs scenario, Debroy said, “We do not have good data on employment and jobs from the current labour enterprise survey.ujuygll 10 themes, including the structural part of the monetary policy, will be drawn up in consultation with stakeholders, such as the Reserve Bank of India, he said.

The council proposed the establishment of an Economy Track Monitor using lead indicators and triggers of action, based on informal assessment and analysis. This would help in the “effective tracking of key economic parameters“, the government said in a press release.Set up in September, the council is chaired by Niti Aayog member Debroy and has economists Surjit Bhalla, Roy and Ashima Goyal as its members. Ratan Watal, principal adviser to Niti Aayog, is member secretary.The EAC is an independent body and is expected to provide advice on economic and related issues to Prime Minister.

The Economic Times, New Delhi, 12th October 2017

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