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PM's Economic Advisory Council members resign

Manmohan Singh is expected to reconstitute new PMEAC shortly
Last Updated 21 May 2009, 20:07 IST

The five-member PMEAC, which was headed by noted economist Suresh Tendulkar, played a key role in providing inputs to UPA government for the formulation of economic policies.

The other members of the Advisory Council include Saumitra Chaudhuri, M Govinda Rao, G K Chaddha and Satish C Jha.

The decision to submit the resignation was taken earlier at a meeting here, sources said.
The Prime Minister had initially constituted PMEAC under the chairmanship of former Reserve Bank Governor C Rangarajan.

Following the resignation of Rangarajan in August last year Suresh Tendulkar was appointed chairman of the PMEAC.

Rangarajan left PMEAC to join Rajya Sabha as a member.

With the economy reeling under the ripple effect of the global recession that had set in September last year, the PMEAC downgraded the Gross Domestic Product (GDP) growth rate to 7.1 per cent during the fiscal 2008-09.

The PMEAC earlier had projected a 7.7 per cent GDP growth rate for the Indian economy during 2008-09.

The PMEAC, while advocating enhanced public expenditure as part of stimulus package to retrieve the economy from the current quagmire of slowdown, had cautioned that the combined fiscal deficit of the Centre and states may rise to more than 10 per cent of the GDP during 2008-09.
 
Fiscal consolidation

In view of the burgeoning fiscal deficit, the PMEAC has stressed the urgent need for  bringing government finances back on the track of fiscal consolidation once there is an improvement in economic conditions.

Considering the fact that the Government is faced with the major challenge of reviving the economy and putting it in the track of high growth, the Prime Minister would expedite constitution of a new PMEAC, official sources said.

The new PMEAC will be expected to provide “sharp” recommendations to formulate necessary policy measures to spur demand in the economy, which in turn would boost overall growth, sources said.
DH News Service

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(Published 21 May 2009, 20:07 IST)

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