Today's Editorial

22 November 2017

A unique opportunity with the PMEAC



Source: By Pradeep S. Mehta: Mint



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, and 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.


Adopt whole-of-government approach


A closer look at the functions of the CEA and NITI Aayog points to a niche which the PMEAC can create for itself, sans any overlap or the need to reinvent the wheel. The CEA reports to the Union finance minister and is tasked with preparing the economic survey, involving rigorous ex-post analysis of economic realities. It lays the ground for predicting forthcoming opportunities and challenges to the economy. The NITI Aayog, on the other hand, provides expert advice to different government departments and state governments on policy formulation, monitoring and supervision.


Armed with data analysis from the CEA, and an understanding of the implementation capabilities of government departments and state governments from NITI Aayog, the PMEAC will be in a position to adopt a whole-of-government approach to provide policy advice to the Prime Minister. A whole-of-government approach requires involving the relevant government departments and regulatory agencies at the Central and state levels, while designing policies. It ensures consistency of approach and prevents ambiguities and incoherence.


Understand sociopolitical realities


The PMEAC must recognize that policy advice at the highest level is a difficult task. It not only requires expertise in core economic areas, but also an excellent understanding of social and political considerations and available implementation capabilities. In other words, the PMEAC is expected to take into account socio-political and bureaucratic constraints while providing top-notch policy advice. Therefore the need to include public policy experts in the council who have a sound understanding of policy design and implementation challenges. The PMEAC must segregate fact from fiction, prioritize intervention areas and suggest implementable solutions. Such solutions need to be simplified and disseminated in a manner that they are likely to meet with least resistance from different stakeholders, including key ideological outfits.

The solutions will also need to be categorized based on the resources required and the expected implementation time frame. The direct access to the office of the Prime Minister, with the ability to tap the resources of the NITI Aayog and CEA, puts the PMEAC in an enviable position to provide practical advice, and witnessing its implementation, should it be in a position to convince the Prime Minister. The part-time association of the majority of its members also appears to be a blessing in disguise, as it has the opportunity to act as a truly independent institution. The members of the PMEAC have the necessary skill set and experience to make the most of this opportunity and contribute to the country’s economic growth revival story. This unique opportunity must not be missed.


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