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The Economic Advisory Council to the Prime Minister (EAC-PM) set up by the Narendra Modi government recently will hold its first meeting at the NITI Aayog on Wednesday. The economic advisory council, headed by Bibek Debroy and comprising reputed economists and experts, is making a comeback after over three years with a changed name. In its earlier avatar, the council was known as the PM’s Economic Advisory Council, or PMEAC. The Modi government decided to set up the panel to propel the economy, as various parameters are showing signs of weakness amid a resource crunch. Debroy had on Tuesday said the enhancement of productivity was important for a country to increase its national income. "National income of any country is the productivity of its citizens in the working age group. There are different sources of growth and national income. Growth can come either through increase in land etc. But it is limited.
Enhancement in productivity thus becomes important," Debroy said at the Internet of Things Summit 2017 organised here by the Confederation of Indian Industry (CII).The meeting of the Debroy-headed panel on Wednesday is significant, given that the Modi government at present has been firefighting to bring the economy back on track after gross domestic product (GDP) growth during the first quarter of this fiscal fell to 5.7 per cent, the lowest GDP growth rate under the present dispensation. Also, the International Monetary Fund (IMF) on Tuesday drastically scaled down its FY18 growth forecast for India by 50 basis points to a four-year low of 6.7 per cent, thanks to the government’s demonetisation move and the implementation of the goods and services tax (GST). When asked, on the sidelines of the event, what was on the immediate agenda of the council, Debroy said the EAC would brief the media on the same on Wednesday. According to its terms of reference, the council is to analyse any issue – economic or otherwise – referred to it by the PM. Addressing issues of macro-economic importance and presenting its views to the PM will be its main responsibility. It is an independent body, so it can also take up issues suo motu. Principal Advisor in the NITI Aayog Ratan P Watal is the council's member secretary. Among part-time members of the EAC-PM are three economists — Surjit Bhalla, Rathin Roy and Ashima Goyal. The government is looking for options to spur the economy and create jobs as it faces a resource crunch since the Centre’s fiscal deficit has already touched 92 per cent of the Budget Estimates for FY18. Debroy and his team might now provide innovative ideas to Modi to reshape the economy. The Manmohan Singh government relied on C Rangarajan for vital assessment of the economy as his views were sought on almost every crucial issue facing the economy, be it the food security Bill, the gas pricing formula or sugar pricing. It is yet to be seen how crucial a role Debroy will play as advisor to Modi. Debroy has been instrumental in bringing transformational change in the Indian Railways during his stint as member of the NITI Aayog. It was based on the Debroy Committee’s recommendations that the government abolished the British-era legacy of a separate Railway Budget and merged it with the General Budget and embarked on changing the fiscal year from April-March to January-December.