Economic slowdown, will study causes: PM's advisors

India must stick to fiscal consolidation, says PM Modi's economic advisory council

Attended by members including leading economists Dr. Surjit Bhalla, Dr. Rathin Roy, Dr. Ashima Goyal and Member Secretary Mr Ratan P Watal, also former Finance Secretary and Principal Adviser NITI Aayog, the deliberations of the Council took stock of the current economic, fiscal and monetary policy environment and identified key issues that it would focus on.

"The recommendations of the five member council would be structured around these themes", the official statement said.

The Economic Advisory Council to Prime Minister Narendra Modi on Wednesday acknowledged that India is going through an economic slowdown but added that it must not deviate from the fiscal consolidation exercise.

Replying queries at the same media interaction, Niti Aayog member and chairman of the Council Bibek Debroy said "whether we like it or not we don't have good data on employment". These include economic growth, job creation, fiscal framework, monetary framework, social sector, the institution of economic governance among others. Sources said although the EAC-PM is unlikely to formulate any immediate advice to the Prime Minister after its first meeting, it will identify a handful of broad groups skills, trade and commerce, digital economy and innovation ecosystem, infrastructure, and agriculture, among others for effective policy intervention advice.

The EAC-PM chairman said, "We have identified 10 themes that we would initially work on till we have our next meeting one month from now".

Debroy said there was a consensus among the members about the various reasons for the slowdown of the economy.

Chief Economic Advisor (CEA) Arvind Subramanian made a presentation to the Council and focused attention on accelerating economic growth, including investments and exports, using a combination of different policy levers.

He also alluded to the lack of adequate employment data to make any conclusive assessment of the job scenario in the country. The economic growth has slipped to a three-year low of 5.7 per cent in the first quarter of the current fiscal.

The Council wants the Modi government to stick to its fiscal consolidation road map and has suggested that a stimulus to the industry should not be at the cost of fiscal prudence.

With the constitution of the Council, the Government has set up a unique independent institutional mechanism. "We will also have another formal meeting next month and give recommendations to the prime minister", Debroy said.

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