A unique opportunity with the PMEAC

Live Mint, November 03, 2017

By Pradeep S. Mehta

A closer look at the functions of the CEA and NITI Aayog points to a niche which the PMEAC can create for itself

The Prime Minister recently constituted the economic advisory council (PMEAC) to provide sound policy advice in key areas such as reviving economic growth and creating enabling conditions for gainful employment. The chairman and member secretary of the PMEAC remain associated with NITI Aayog in their old capacities, thus providing critical synergy between the two organizations.

Along with NITI Aayog, the office of the chief economic adviser (CEA) is dedicated to providing expert policy advice to the government. In addition, the government receives policy-related suggestions from stakeholders such as bureaucrats, industry, consumer groups, think tanks, academia, media, experts, among others through both structured and non-structured processes.

Against this backdrop, concerns are being raised about the contribution that the PMEAC can make in the already overcrowded space of providing policy advice to the government.

It is true that different stakeholders within and outside the government provide policy advice to the government. However, more often than not, each of these stakeholders directly or indirectly represent a specific interest group, such as the Central government, state governments, foreign investors, domestic industry, intermediaries, consumers, among others, and, by design, may not be able to adopt a holistic approach. Policy decisions cannot be based on the interests of a particular group, and must take into account diverging interests of stakeholders, which often appear to be in conflict. Regulatory capture must be avoided and policymakers must also reach out to stakeholders who often remain unheard in policy-related conversations. Consequently, while policymakers must solicit recommendations from different stakeholder groups, they should strive to adopt an all-inclusive approach in policymaking.

Such an approach will require independent astute understanding of the interlinkages between the interests of different stakeholder groups, including stakeholders who have not been able to effectively communicate their perspectives. An ability to gauge the individual and consolidated impact of the interests of different stakeholders on the economy, including their respective weightage, will be essential. This would require adoption of a systems approach, which considers the entire economy as one system, and different stakeholders’ interests as sub-systems/parts of the entire system.

Given its internal expertise, positioning, and direct access to the Prime Minister, the PMEAC is best placed to adopt a systems approach to provide non-partisan policy advice. But if it contained public policy experts, it could be richer in its advice.

Pradeep S. Mehta is secretary general of CUTS International.

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