Economic Advisory Council to the Prime Minister Meets

A meeting of the Economic Advisory Council to the Prime Minister (EAC-PM) was held in Delhi on Thursday, 18th November, 2021. All the Members were unanimously agreed on the Budget of 2021-22 that it was well taken in all the spheres due to the transparency, realism, reformist and clear growth-oriented Budget. Looking beyond the current year, 2021-22, Members were optimistic about real and nominal growth prospects in 2022-23. Other than an element of the base effect, the contact intensive sectors and construction should recover in 2022-23. Once capacity utilization improves, private investments should also recover. Therefore, Members felt a real rate of growth of 7 to 7.5% in 2022-23 was likely.

However, this should not mean that the Union Budget for 2022-23 should project unrealistically high tax revenue or tax buoyancy numbers. The Union Budget for 2021-22 was applauded because of reform measures, as well as transparency and realism in the numbers. EAC-PM Members were of the view that these dimensions should be carried forward into the 2022-23 Budget too, signalling use of the extra revenue in the form of capital expenditure and human capital expenditure, since Covid has led to a human capital deficit. There should also be a clear road-map for privatization and the growth orientation of last year’s Budget should also be maintained.