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Challenges that lie ahead for the newly formed Economic Advisory Council to the Prime Minister
The reconstitution of the Economic Advisory Council (EAC) to the Prime Minister, as viewed by a section of economists, is akin to deviation of poll promise made by the BJP-led NDA regime in 2014.

Amidst the other rhetorics like bringing'Achhe Din'or sending corrupt politicians to jail, the then Prime Ministerial nominee of the NDA Narendra Modi kindled attention of the learned few by promising Minimum government and Maximum governance if he got the chance to form the government at the Centre.

Keeping the poll promise of Minimum government and Maximum governance, reportedly, Modi, immediately after forming the government at the Centre, eradicated the UPA era practice of forming Group of Ministers (GoM) for different purposes. The move was lauded by many. In that line he also discontinued the PM's Economic Advisory Council which housed a group of professional economists.

But the Modi government, in a surprise move for many, has recently formed the EAC with NITI Aayog member Vivek Debroy as its head. The changing situation might compel the government to reconstitute the Council. Interestingly, the situation remained conducive for Modi even after demonetisation shook the country with the BJP registeringa landslide victory in Uttar Pradesh Assembly elections held earlier this year.

However, the situation turned grim for him as soon as the Central Statistical Organization released the data of Gross Domestic Product (GDP) of the first quarter of the current fiscal year which showed signs of slowing down of the country's growth. The GDP, which reflects a country or state's actual picture of development, touched 5.7 per cent in April-June quarter of the fiscal year 2017-18, quite unexpectedly for the Modi government which has been drawing flak from a group of prominent economists including former Prime Minister Dr Manmohan Singh.

It has been learnt that the BJP's ideological mentor the Rashtriya Swayamsevak Sangh (RSS), too, has expressed concerns on the economic slow down compelling the government to think differently. In such an embarrassing situation, the government formed the EAC to PM for suggesting ways to prevent further dip in the economy.

In the meanwhile, the EAC, in its recently held first meeting, selected 10 priority sectors of the economy that needed urgent attention of the government to boost growth. The council, reportedly, has suggested PM Modi, among others, to give importance to employment generation and public investment. However, the EAC, reportedly, refrained from identifying the causes of the economic slowdown which raises questions over PM Modi's commitment towards bringing transparency in the governmental work. Despite this, the EAC will also play an important role in preparation of the next fiscal year's Union budget, as a group of economists opined. Thus, the Council will face more and more challenges in the days to come.

According to a group of economists in a developing country like India, a majority of people have nothing to do with the GDP's number as the latter's growth could not ameliorate the actual economic state of the poor. In this context, prominent economist Jean Dreze's comment seems more relevant. The India-born Belgian economist, who was a member of the previous UPA government's National Advisory Council, citing history, once pointed out that even a GDP growth of 7.5 per cent could not bring significant improvement in the quality of life of the common people. As such, the hardships of the common people increase day by day with the GDP growth rate declining to 5.7 per cent in Q1.

However, a group of economists including the PM's EAC member Surjit Bhalla hope that the GDP of the July-September quarter, data of which is yet to be released, would show signs of economic recovery. Similarly, a number of economists including the IMF's chief Christina Lagarde have opined that the country's economic slowdown is transient in nature and such economic decline is inevitable for sometime when big ticket reforms take place.

What is interesting is that although all the economists have acknowledged the economic slow down but the pro-government economists, unlike the others, refuse to accept the fact that the cause of the decline is demonetisation. However, the economists, who are critical of PM Modi, have warned the government that the hasty implementation of Goods and Services Tax (GST) also could bring down the country's economic growth. According to them, the GST has created major disruption in the business activities across the country which would eventually derail the growth trajectory.

Surprisingly, the disruptions brought about by the GST became more obvious as days passed on. In this context, the experts' view is that the SME sector as well as small traders are mostly bearing the brunt of GST related problems. Recently, Vodafone India came forward to help the small traders in registering themselves in GSTN, filing their returns etc so that the latter could overcome the hiccups created by the GST implementation. It certainly proves that the small traders are facing problems in filing GST returns. The problemsbeing faced by the traders have also been acknowledged by the government. It became evident with the Central Revenue Secretary Dr Hashmukh Adhia saying that the government remains committed to end unnecessary burden upon the traders and common people created by GST. But the Revenue Secretary, who is also the Secretary of the GST council, made a startling revelation that instability created by GST would persist for at least one year.

The macro-economic data calculations differ from the PM Modi's Sabka Saath Sabka Vikash promise made during the last Lok Sabha polls as the calculations represent economic activities of less than 10 per cent people of the country. The Indian economy, as experts believe, is even now an agrarian economy although the agriculture sector lacks proper government attention. NITI Aayog's recent prediction about the country's agricultural growth also brings in pessimism among the farming community as the predicted growth is not more than 3.1 per cent for the current fiscal year. The government's highest think-tank has identified poor monsoon as the prime cause of the negative growth of the agriculture sector in the current fiscal year. The government's refusal to waive off agricultural loanshas already deteriorated the farmers' condition. The newly formed EAC, as some economist opined, must advise the PM to formulate farmer friendly agricultural policy in the days to come.

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of merinews.com. In case you have a opposing view, please click here to share the same in the comments section.
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