The Centre on Wednesday announced that it has reconstituted the Economic Advisory Council to the Prime Minister with effect from Thursday, for a period of two years. The government dropped National Institute of Public Finance and Policy member Rathin Roy and Brookings Institution member Shamika Ravi from the council, Business Standard reported.
Both Roy and Ravi had raised concerns over the state of the Indian economy. In July, Roy said that India was currently dealing with a structural demand problem. Roy said India was facing a “silent fiscal crisis” because of a shortfall in tax revenues. He had also expressed reservations about the government’s decision to raise a part of its gross borrowing programme from external markets in foreign currencies.
India’s Gross Domestic Product growth rate fell to a five-year low of 5.8% for the April-June 2019 quarter. Following this, Finance Minister Nirmala Sitharaman announced a series of economic measures. She also announced that the corporate tax would be cut from 35% to 22%, in a bid to encourage investments.
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Ravi, on the other hand, said in August that many ministries need to follow “a national growth strategy with time-bound goals”. “Need major reforms, not mere tinkering,” she had tweeted. “Leaving economy to the finance ministry is like leaving the growth of a firm to its accounts department.”
Bibek Debroy and Ratan Watal will continue to be the chairperson and member-secretary to the council, the government said on Wednesday.
Apart from Debroy and Watal, Sajjid Chenoy, the India economist at JP Morgan, has been included in the team as a part-time member. Ashima Goel will continue to be the other part-time member, the government said. With the reconstitution of the council, its strength has been reduced from five to four members.
The Economic Advisory Council was set up by Prime Minister Narendra Modi in September 2017 in a bid to bring in reforms to the financial system. In December 2018, economist Surjit Bhalla resigned from the council, saying that he found it inappropriate that the NITI Aayog should be involved in the presentation of data by the Central Statistics Office.
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