PMEAC to submit economic review only to Prime Minister

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C Rangarajan C Rangarajan
Summary* Decision apparently taken at the behest of the PMO

Concerned about the government speaking in different voices on critical economic issues just days ahead of the presentation of the Union Budget, the Prime Minister’s top economic advisor C Rangarajan has decided to submit his Annual Review of the Economy 2012-13 as a confidential document to Manmohan Singh.

Rangarajan, chairman of the Prime Ministers’ Economic Advisory Council (PMEAC) confirmed the move to The Indian Express. But he claimed the delay was due to late arrival of data to his team.

“We have prepared a report for the Prime Minister but are still debating on whether to release it to the public. All the data came late and it has delayed us,” the PMEAC chairman said.

Incidentally, with the data already available the Central Statistics Office had this month projected a 5 per cent estimate for the Indian economy to grow at in 2012-13, which has been hotly contested by the finance ministry. North Block has instead projected growth at 5.5 per cent in the fiscal on the grounds that many indicators have begun to turn positive in the latter half of the year.

To ensure that there is no repeat of the same, the PMEAC has broken away from tradition. The council traditionally presents its Review of the Economy in February as a pre-cursor to the Economic Survey and the General Budget. Last year, it had released its Review of the Economy 2011-12 on February 22.

The decision to keep the projections confidential was apparently taken at the behest of the Prime Ministers’ Office, even though the panel led by former RBI governor has forecast the economy will expand at 5.5 to 5.7 per cent in the current fiscal, much closer to the finance ministry’s estimates.

However, apart from its estimates on GDP growth for the fiscal, the review also red flags the international scenario and growth, fiscal deficit and inflation projections for the next financial year. These could take away quite a bit from the annual Economic Survey, to be presented a day ahead of the Budget. The PMEAC had in August 2012 forecast a 6.7 per cent GDP growth rate.

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