PM's economic panel against stimulus

PM's economic panel against stimulus

The newly constituted Economic Advisory Council to the Prime Minister (EAC-PM) on Wednesday batted for sticking to fiscal consolidation at a time when there was demand for fiscal stimulus to boost sagging economic growth.

"In the next few months, the focus of the Council will be, however, towards the budget that is likely to be presented in the next 3-4 months".

The detailed report, which will be handed over to the Prime Minister once finalised, will be structured around the 10 identified areas and views would be formulated after consultations with all relevant Ministries and Departments, including the Finance Ministry, and also the RBI, EAC Chairman Bibek Debroy said, addressing a press conference on Tuesday following the first meeting of the council.

Briefing the media, Debroy said that the panel picked 10 issues on which it will initially work.

"The themes identified are economic growth: employment and job creation, informal sector and integration: fiscal framework, monetary policy, public expenditure, institutions of economic governance, agriculture and animal husbandry, consumption and production patterns and social sector", he said.

It was also agreed that specific issues papers would be brought out by members to address key concerns, and linkages will be established with key national Institutions.

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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.

Whether stimulus or not, EAC-PM on Wednesday said it would give suggestions to revive economic growth and create job opportunities to the prime minister.

These include Dr. Bibek Debroy, Member, NITI Aayog as the Chairman, Shri. Replying to queries on job creation, Mr Debroy admitted "whether we like it or not, we don't have good data on employment".

Prime Minister Narendra Modi formed the EAC last month after a gap of three years on the back of slow economic growth.

If the government does not deviate from its target of reining in its fiscal deficit at 3.2 per cent of the gross domestic product (GDP), providing stimulus would be nearly impossible. "Today, it was the first formal meeting".

Rathin Roy dismissed lowering of India's growth projections by the International Monetary Fund (IMF) and the World Bank, saying they often go "wrong". The country's GDP growth has been dipping consistently for several quarters.

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