Chennai: For the first time, the Chief Minister of Tamil Nadu is having an Economic Advisory Council (EAC) and MK Stalin has roped in global talents to give a renewed thrust to the economy battered by the Covid pandemic. Earlier, the state government only had the State Planning Commission, now re-designated as State Development Policy Council. Interestingly, the Chief Minister had included in the panel known Modi-baiters like Raghuram Rajan and Arvind Subramanian among others.
“Based on the recommendations of the council, the government will revitalise the state's economy and ensure that the benefits of economic growth reach all segments of society,” Governor Banwarilal Purohit said in his customary address to the first session of the House on Monday.
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In its composition, the panel is neither loaded in favour of neo-liberal torch bearers nor stacked with their counterparts. It has Jean Dreaze who was instrumental in the drafting of the Mahatma Gandhi National Rural Employment Guarantee programme during the UPA regime and Dr Narayan, Economic Adviser to former Prime Minister Atal Bihari Vajpayee, known as a pragmatic bureaucrat. Narayan is also a visiting faculty of the London School of Economics and the Singapore National University. And, Esther Duflo, who received the economic Nobel along with her husband Abhijit Banerjee and Michael Kremer. Both the Government of India and many states follow the model of the Abdul Latif Jameel Poverty Alleviation Lab (J-PAL), founded by the couple.
The government made it clear that it required expert advice from the best economists available globally, who are familiar with Tamil Nadu, its economy, society and polity, as also the trends in the Indian and global economy. The terms of reference have provided functional flexibility to the members so that they can decide on their operational modalities. Primarily, it will proffer 'general guidance on economic and social policy, social justice and human development issues, in particular matters related to ensuring equal opportunities to women and the well being of underprivileged groups.' Further, it would 'make suggestions on boosting economic growth, employment and productivity in the state' among other things.
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Rajan, currently a professor at the Chicago School of Business, had left the RBI without a second term as he had differences with the Modi government in its first term. Arvind Subramanian had quit as Economic Adviser to the government over differences.
The panel is expected to have a welfare-oriented pro-development approach given the havoc wrought by the pandemic. “Though some of the members are neo-liberals, committed to privatisation including that of public sector banks, they would suggest a strengthening of the demand side and generally support progressive programmes to boost agriculture and welfare measures as well as local bodies,” said noted economist Venkatesh Athreya. “We need the market, we need the private sector, but that does not mean only big corporates. Constituting the panel is a welcome beginning for economic recovery,” he added.
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