Special adviser likely to replace PMEAC in next govt

Prime Minister's Economic Advisory Council (PMEAC), an independent but all powerful body representing government’s stand on key economic issues, may be dismantled under the new BJP-led government.

If informed sources in the party are to believed, Prime Minister-designate Narendra Modi would like to have an economic advisor right in his office from where he would operate. A similar practice was followed by former Prime Minister Rajiv Gandhi who had appointed Montek Singh Ahluwalia as special secretary in the Prime Minister’s Office to advise him on economic issues.

“He (Modi) is certainly not going to depend on periodical reports and advice from a far away office (PMEAC office was housed in Vigyan Bhavan, about one km away from PMO) like the one we have now . His style of functioning is more or less based on a direct and regular contact with key officials in his office. Modi would rather give a target and then evaluate how much has been achieved,” a BJP leader said.

Besides giving advice to the Prime Minister on a whole host of economic issues like inflation, microfinance, industrial performance, the PMEAC of the day also submits periodic reports to him on macroeconomic developments and issues with implications for economic policy. 

The periodic reports of the PMEAC — the annual ‘Economic Outlook’ and ‘Review of the Economy’ — also influence policy formation of other economic agencies, financial institutions and businesses.

“Since the issues on which the adviser will assist the prime minister are all important and require his constant vigil, he would like to have an officer attached with the PMO,” the BJP leader said.

Asked on whether the new set up would undermine the importance of the current PMEAC, he said, economic advisers’ post has always been considered as important and most crucial. “It is so important that at one point it was even chaired by the then Prime Minister Atal Bihari Vajpayee himself,” he recalled.

The PMEAC has been constituted several times since independence. 

The last PMEAC, which was constituted in December of 2004 was headed by Suresh Tendulkar, who resigned upon the completion of the term of the then UPA government in May 2009.