Economic Advisory Council To Meet Thursday Over Public Spending Amid COVID-19

The Economic Advisory Council of the Fifteenth Finance Commission will meet on April 23-24 to take stock of the emerging economic situation arising out of the Covid-19 outbreak. The virtual meeting of the council will be presided over by 15th Finance Commission Chairman, N.K. Singh and attended by members and senior officials of the Finance Commission.

The Council will study the implications of Covid-19 on GDP growth in 2020-21 and 2021-22. It will also look at uncertainty about macro variables, tax buoyancy and revenue in the current year and next year, and public expenditure that is required to shore up the economy.

The meeting comes at a time when the finance ministry is working on a stimulus package to stem job losses and help companies to stay afloat. The Centre has extended the lockdown till May 3, while permitting resumption of some economic activities, mostly in rural India, from April 20.

Last week, the Reserve Bank of India had refrained from making any projections for growth and inflation saying the performance of these key macroeconomic parameters in the days ahead would depend upon the intensity, spread and duration of COVID-19.

The economic advisory council was set up in April 2018 to advise the Finance Commission, and assist in the preparation of papers and research studies on socio-economic issues.

Meanwhile, the International Monetary Fund has slashed India's GDP growth projection to 1.9 per cent in 2020 from 5.8 per cent estimated earlier as the global economy is staring at the worst recession since the Great Depression in the 1930s. The World Bank has estimated India's economy to grow between 1.5 per cent and 2.8 per cent in the 2020-21.

And many economists have predicted that India's economy might witness its first quarterly contraction in two decades as a result of the now extended lockdown.