Modi's Economic Advisory Council to focus on economic growth, employment

Modi's Economic Advisory Council to focus on economic growth, employment

"The deliberations of the new economic advisory council to the Prime Minister also reflect its value addition as an independent institutional mechanism, to provide inf ormed advice to the Prime Minister on addressing issues of macroeconomic importance and related aspects", the government statement said.

Sources said "accelerating economic growth and employment" appears to be a key issue on the table for the advisory group after the GDP growth registered a three-year low at the end of the first quarter of the current fiscal.

Since the presentation of the Union Budget is around the corner, in the next few months, the council's focus will also be on guidance to the preparation of the Budget.

The council took stock of the current economic, fiscal and monetary policy environment and resolved to focus on key identified issues.

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

The key issues include informal sector and integration, economic growth, institutions of economic governance, patterns of consumption, and production and the social sector.

The entire thrust of the council would be on specific implementable recommendations, which would distinguish it from other bodies.

The Council's primary role is to advise Prime Minister Narendra Modi on the macroeconomy, said Debroy. "It is not our job to push those recommendations to the Finance Ministry, our job is to report to the Prime Minister", Debroy said.

Other members in the EAC include economists Surjit Bhalla, Rathin Roy, Ashima Goyal and the Committee's Member Secretary Ratan P Watal. Asked about the lack of jobs in the economy, Debroy said there was no reliable data available and the panel would examine the issue. Replying to queries on job creation, Mr Debroy admitted "whether we like it or not, we don't have good data on employment". "In a country like India, you can not get good data on employment and jobs from enterprise surveys".

The economic slowdown has triggered calls for a fiscal stimulus to revive growth but several economists and policy-makers have said the government should not deviate from the path of fiscal consolidation.

GDP growth has been sliding for five consecutive quarters, hit by stagnant private investment, weak exports along with one-off factors such as demonetisation and the implementation of the GST.

Roy, however, claimed: "IMF's growth projections are 80 per cent wrong. The World Bank's growth projections are 65 per cent wrong", he said, when asked to comment on the lowering of growth projections by multilateral lending agencies.

Responding to the International Monetary Fund slashing India's growth forecast for 2017-18 to 6.7 per cent in its October projection from 7.2 per cent in April, Rathin Roy said the body's estimates were wrong 80 per cent of the time.

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