27/09/2019 - Indian Economy | Mainstorming

IAS Parliament 5 years

KEY POINTS

PMEAC

The Council was set up with a view to provide a sounding board for inculcating awareness in government on the different point of view on key economic issues.

Role and functions of PMEAC

· Analyzing any issue, economic or otherwise, referred to it by the Prime Minister and advising him thereon;

· Addressing issues of macroeconomic importance and presenting views thereon to the Prime Minister. This could be either be suo-moto or on a reference from the Prime Minister or anyone else;

· Submitting periodic reports to the Prime Minister on macroeconomic developments and issues with implications for economic policy;

· Attending to any other task as may be desired by the Prime Minister from time to time.

Importance of PMEAC

· The periodic reports of the PMEAC the annual Economic Outlook and Review of the Economy - are the most widely followed.

· Additionally the remarks and opinions of the Chairman and members of the PMEAC get widespread media coverage and are influential in formulation of the policies of other economic agencies, financial institutions and businesses.

· Many financial periodicals publish interviews and speeches of PMEAC Chairman to understand the most critical economic woes facing the country like inflation, monetary measures etc.

· Views of the PMEAC are also sought after to better understand the prospects of economic performance of India like its growth rates as well as on policy matters like autonomy of regulators^[ and cotton export policy.

· In February 2011, PMEAC recommended to the government to initiate the process of fiscal consolidation given that the international financial crisis has started to ease and the government had to re-initiate its commitment to the Fiscal Responsibility and Budget Management Act.