New Delhi: The newly constituted Economic Advisory Council to the Prime Minister wants the government to stick to its fiscal consolidation road map and has suggested that stimulus to the industry should not be 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 creation that need attention. Chief Economic Adviser Arvind Subramanian gave a presentation to the council on ways to accelerate economic growth, including investments and exports by using a combination of different policy levers.
“We will come out with implementable solutions for economic problems and present them to the Prime Minister,” council’s chairman Bibek Debroy told reporters after the meeting. When asked whether the government can breach fiscal deficit to provide stimulus to the industry, Debroy said, “There is a consensus (among the members)… that the fiscal consolidation exercise should not be deviated.”
The industry is seeking fiscal stimulus to tide over the economic slowdown. The economic growth has slipped to a three-year low of 5.7 per cent in the first quarter of the current fiscal. The government has pegged the fiscal deficit target at 3.2 per cent for the current fiscal and 3 per cent for the next financial year.
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 also have another formal meeting next month and give recommendations to the prime minister,” he said.
According to an official statement, another key issue recognised was effective tracking of key economic parameters, through possible mechanisms. What the council possibly has in mind is instituting an ‘economy track monitor’ using lead indicators and trigger for action, based on informed assessment and analysis.