- 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.
- EAC has said that fiscal consolidation issue as a reason behind this recommendation.The Centre’s fiscal deficit for 2019-20 is 3.3% of GDP.
- 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.
- EAC has also suggested the government to streamline and harmonise the Goods and Services tax(GST) rates.
- 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.
- 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.
- 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.
