PM Economic Advisory Council: Need to set up GST Council-like body for public spending

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  1. The Economic Advisory Council to the Prime Minister(EAC-PM) has recommended a GST Council-like mechanism for the Centre and states to oversee public expenditure.
  2. EAC has said that fiscal consolidation issue as a reason behind this recommendation.The Centre‚Äôs fiscal deficit for 2019-20 is 3.3% of GDP. 
  3. Hence,there are limits to public expenditure as there is a fiscal deficit issues.But focused and strategic expenditure by the Centre and states together could yield efficiency gains.
  4. EAC has also suggested the government to streamline and harmonise the Goods and Services tax(GST) rates.
  5. They have also recommended a reduction in direct tax rates.But this can be done only when both corporate and income tax exemptions are removed.
  6. PM-EAC is a non-constitutional, non-permanent and independent body constituted to give economic advice to the Government of India, specifically the Prime Minister.
  7. The council serves to highlight key economic issues facing the country to the government of India from a neutral viewpoint.It advises the Prime Minister on economic issues like inflation, microfinance, and industrial output.