Moneycontrol
Oct 11, 2017 12:50 PM IST | Source: NEWS18.com

Issues that PM's economic council may discuss in its first meeting today

The Prime Minister’s Economic Advisory Council (EAC-PM) will hold its first meeting on Wednesday, amid a sense of urgency about the state of the economy. The mandate of the council is to analyze all critical issues, economic or otherwise, and advise the PM accordingly.

Issues that PM's economic council may discuss in its first meeting today
Narendra Modi

The Prime Minister’s Economic Advisory Council (EAC-PM) will hold its first meeting on Wednesday, amid a sense of urgency about the state of the economy. The mandate of the council is to analyze all critical issues, economic or otherwise, and advise the PM accordingly.

State of the Economy: This may be the overarching theme around which all other issues are framed. Growth has slowed to a 3-year low, employment creation is anemic and export growth is faltering. Further, demonetization and GST affected the economic momentum, as detailed in a World Bank report. The council will have to come up with ideas on how to kick start the economy.

Banking Sector: The crisis in the banking sector continues and unless this is solved it will act as a drag on the economy. The total pile of Non Performing Assets increased to a record high of Rs. 9.5 lakh crore, a Reuters report said. The government has already set in motion a process to recover as much of these bad loans as possible. However, the resolution of bad loans will have to be fast tracked in order for banks to start lending again. This will ensure that firms can access capital for investments.

Exports: Export growth has stalled. This is also because of weak global demand, but increasing exports is also important for the success of the PM’s Make in India programme. Exports will also give a fillip to small and medium enterprises (SMEs) which in turn will boost employment. The government last week relaxed some GST norms for exporters, with an eye to providing some relief. Growing exports will also help shrink the Current Account Deficit (CAD), one of the key indicators of fiscal health.

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