PMEAC rejects fiscal stimulus, prioritizes job creation

Oct 12, 2017, 00:34
PMEAC rejects fiscal stimulus, prioritizes job creation

The recently constituted Economic Advisory Council to the Prime Minister has identified 10 priority areas for accelerating economic growth and employment over the next six months, with greater last mile connectivity.

The meeting attended by members, including leading economists Surjit Bhalla, Rathin Roy, Ashima Goyal and member secretary Ratan P Watal, also former finance secretary and principal adviser NITI Aayog, took stock of the current economic, fiscal and monetary policy environment and identified key issues that it would focus on. The meeting of the EAC-PM chaired by NITI Aayog member Bibek Debroy, concluded that the role of EAC is only to make recommendations to the Prime Minister, but said it can complement the RBI on monetary policy ideas and consult the central bank on the same.

At the meeting held at the NITI Aayog, it was also chose to work on the monetary policy and fiscal framework in consultation with the Reserve Bank of India.

Mr. Debroy said patterns of consumption and production and social sector are among other issues on which the council will work.

The Council, in its meeting, acknowledged the slowdown in the Indian economy and has asked its members to come up with detailed papers in the next Council meeting.

The council which held its first meeting here PMEAC chalked out the major priorities for accelerating economic growth and employment while accepting that the country is witnessing a slowdown.

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.

"In a country like India, you can not get good data on employment and jobs from enterprise surveys".

To a query on job losses in the wake of demonetisation and implementation of the Goods and Services Tax (GST), Debroy said, "This issue was not examined in today's meeting".

The PMEAC, which is headed by NITI Aayog member Bibek Debroy, said that the government should stick to the fiscal consolidation roadmap.

On IMF lowering India's growth projections, EAC-PM member Rathin Roy said his experience from the past was on 80 per cent of the occasions, IMF projections were incorrect.

The Asian Development Bank too lowered India's current fiscal growth to 7 per cent from 7.4 per cent, while RBI cut economic growth forecast to 6.7 per cent from earlier projection of 7.3 per cent. This has prompted several agencies to lower India's growth forecast.