India: Modi gets four heads to fix the economy – 26 Aug 2017

  • On 25 Sep 17, Modi government took a new step to give a push to the economy. It appointed four economists in the Economic Advisory Council (EAC) to be headed by NITI Aayog member Bibek Debroy, including Surjit Bhalla, Rathin Roy and Ashima Goyal as part-time members.
  • NITI Aayog’s Principal Advisor Ratan Watal will serve as its member secretary. Members of Modi’s EAC come with solid credentials as economists and champions of liberal economics. They have also been votaries of Modi’s past economic decisions like demonetisation.
  • As the note ban is being majorly blamed for the current slowdown, the four wise heads may have a tough task ahead of themselves. However, their role will be primarily to give inputs to the PM, which he may not get from within the government.
  • There is a growing sense that Modi’s decision to set up the EAC may have come a bit late – over three years after he assumed power as PM and at a time when the GDP has slipped to 5.7% in 2Q17, the lowest since May 14.
  • The fact that it took Modi three years to realise the need for EAC raises questions over its appointment now, even as the PM is not bound by its advice. Neither were Singh or Vajpayee.
  • Economists think in one direction, politicians in the other. So a genuine question also arises as to what this council will be able to achieve for Modi and India as political parties, including BJP, gears up for electoral battles ahead.
  • Starting from Gujarat by the end of this year, states like Karnataka, Meghalaya, Nagaland, Tripura, Madhya Pradesh, Chhattisgarh, Rajasthan, Mizoram will go to polls in 2018.

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