The government has reconstituted the Economic Advisory Council to the Prime Minister for a period of two years after its term came to an end last month. Bibek Debroy continues to be the Chairman of the EAC-PM. Former RBI Deputy Governor Rakesh Mohan, IIM Ahmedabad Professor TT Ram Mohan and Director-General of the National Council of Applied Economic Research (NCAER) Poonam Gupta are the new part-time members inducted into the seven-member body.
Rakesh Mohan, currently a Senior Fellow at the Jackson Institute for Global Affairs, Yale University and Distinguished Fellow at Brookings India, has had a long career in Indian policymaking, with expertise in central banking, monetary policy, multilateral institutions, financial markets, infrastructure and economic research. He is also a senior adviser to the McKinsey Global Institute.
In a recent column ‘Why has India’s growth slowed,’ published in Business Standard, professor TT Ram Mohan wrote that while critics blame it on major policy lapses on the part of the Narendra Modi government such as demonetisation, GST and absence of major economic reforms; the economic slowdown is primarily on account of the banking crisis. In 2017, he wrote that while academics, economists and media commentators were quick to pronounce judgement that demonetisation is a blunder, UP election results showed that the pundits got it wrong. “Demonetisation did not work against the BJP in the recent polls and may have even contributed to its huge victory in UP”, he wrote.
Before joining NCAER in April this year, Gupta was lead economist, global macro and market research, International Finance Corporation and Lead Economist for India at the World Bank. She has earlier been the Reserve Bank of India Chair Professor at National Institute of Public Finance and Policy and has also worked with International Monetary Fund. Last year, she presented a paper, co-authored by Barry Eichengreen from the Berkeley University and Rishabh Choudhary from the World Bank, titled ‘Inflation targeting in India: an interim assessment’.
It said inflation targeting has led to reduced volatility of a range of inflation-related outcomes and in the stronger anchoring of inflation expectations, which appears to have enhanced the ability of the RBI to respond to the exceptional Covid-19 shock. An April 2018 blog for World Bank titled ‘India’s remarkably robust and resilient growth story’ by Gupta and Florian Blum had stated that to raise the income of at least 50 per cent of Indians to levels of the global middle class, the economy not only
needs to return to 8 per cent growth or higher but also maintain such growth for the next three decades.
Other part-time members who have been retained in the EAC-PM include JP Morgan Chief India Economist Sajjid Chinoy, Credit Suisse India equity strategist Neelkanth Mishra and Kotak Mahindra Asset Management managing director Nilesh Shah.
The Council has been tasked to analyse any issue, economic or otherwise, referred to it by the PM and advising him thereon besides addressing issues of macroeconomic importance, the Cabinet Secretariat said in a notification on Wednesday. Part-time members of EAC-PM may be paid sitting fee of Rs 10,000 per day of sitting.
“This could be either suo-motu or on reference from the PM or anyone else,” it said, adding that the Council will attend to any other task as may be desired by the PM from time to time. “The Prime Minister has approved the reconstitution of the Economic Advisory Council to the PM (EAC-PM) for a period of two years or until further orders, whichever is earlier,” it said.
In a recent article, EAC-PM member Mishra argued that setting up of the National Asset Reconstruction Company Ltd was essential in cleaning the slate of the last business cycle and to prepare the ground for the next investment cycle. Chinoy recently wrote that the BRICS group of countries are now better prepared to deal US Fed taper tantrum-like policy response of 2013, and the group should now focus on reviving growth.
Economist V Anantha Nageswaran and member-secretary Ratan Watal are no longer part of the reconstituted EAC-PM. In a recent white paper, Nageswaran, along with Sumita Kale and Laveesh Bhandari, highlighted a possible four-pronged framework that can take the Direct Benefit Transfer programme to a higher level of efficiency and make a greater impact on welfare.
The EAC-PM is an independent body to advise the government, especially the Prime Minister, on economic and policy-related matters.