The newly constituted Economic Advisory Council to the Prime Minister (EAC) is of the view that the government should stick to its fiscal consolidation road map and any stimulus to industry should not come at the cost of fiscal prudence. The Council, which met for the first time on Wednesday, has identified ten themes, including economic growth and job creations, that need attention.
Chief Economic Adviser Arvind Subramanian presented to the council ways to accelerate economic growth, including investments and exports by using a combination of different policy instruments. "We will come out with implementable solutions for economic problems and present them to the Prime Minister," EAC chairman Bibek Debroy told reporters after the meeting.
When asked whether the government should breach the fiscal deficit to provide stimulus to industry, Debroy said, "There is a consensus among members that the government should not deviate from the fiscal consolidation exercise.'' Industry is seeking fiscal stimulus to tide over the economic slowdown. The economic growth has slipped to a threeyear low of 5.7 per cent in the first quarter of the current fiscal. The government pegged the fiscal deficit target at 3.2 per cent for the current fiscal and 3 per cent for the next financial year.
The council has been set up with the approval of the prime minister on September 26, 2017. Its members are Principal Adviser to NITI Aayog Ratan P Watal as member secretary and Surjit Bhalla, Rathin Roy and Ashima Goyal as parttime members. Debroy further said the council will have another formal meeting in November. Today, it was the first formal meeting.
"We will also have smaller meetings with stakeholders. We will have another formal meeting next month and give recommendations to the prime minister, he said. According to a statement, another key issue recognised was effective tracking of key economic parameters, through possible mechanisms for instituting an 'economy track monitor' using lead indicators and trigger for action.