New Delhi: With gathering concern over the slowdown in the economy, Prime Minister Narendra Modi announced today the constitution of a five-member Economic Advisory Council to the Prime Minister (EAC-PM) under the chairmanship of Bibek Debroy, member Niti Aayog. The other four members in the committee are: Surjit Bhalla (part-time member); Rathin Roy (part-time member); Ashima Goyal (part-time member) and Ratan Watal (member-secretary).
According to a statement issued by the government, the EAC will look into economic and other issues. The terms of reference include: “To analyze any issue, economic or otherwise, referred to it by the Prime Minister and advising him thereon; to address issues of macroeconomic importance and presenting views thereon to the Prime Minister. This could be either suo motu or on reference from the Prime Minister or anyone else; to attend to any other task as may be desired by the Prime Minister from time to time.”
The Economic Advisory Council to the Prime Minister was first constituted by then Prime Minister Manmohan Singh on Dec 29, 2004 under the chairmanship of C. Rangarajan. The council included Saumitra Chaudhuri, V.S. Vyas, Pulin B. Nayak and Dilip M. Nachane as its members. In UPA I, the council included Govinda Rao and Suman K. Bery. The council had, however, resigned upon the completion of the then Union government’s term in May 2014.
The work of the council included offering advice to the PM on policy matters from time to time. Besides, it also prepared a monthly report on economic developments at home and abroad for the Prime Minister. The constitution of the EAC-PM comes amidst growing concerns over the pace of growth in the economy and the slow pace of job creation.
While the government has been pushing for skill development, not many have entered the job cycle. Government data shows that the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), has been struggling to achieve end-results. Until July 2017, while 30.67 lakh candidatess got trained or were undergoing training across the country, less than a tenth — 2.9 lakh candidates — received placement offers.
Even on the GDP front, concerns have been growing in the market. In the quarter April to June 2017, the GDP growth fell to 5.7 per cent from 7.9 per cent in the corresponding period last year, after falling consistently during each quarter in the intervening period. The reduction in growth came despite the government stepping up expenditure in the initial months. During the April-July period, the government spent Rs 95,126 on capital expenditure, which is 30.8 per cent of the full year target of Rs 3.09 lakh crore – as against 28.9 per cent in the same period last year. The economy has seen a sharp decline in credit growth, too. RBI data shows that the outstanding bank credit fell to (-) 2.7 per cent as on July 21, 2017.
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