{"id":107097,"date":"2026-06-07T10:53:13","date_gmt":"2026-06-07T05:23:13","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=107097"},"modified":"2026-06-07T13:07:18","modified_gmt":"2026-06-07T07:37:18","slug":"eac-pm-growth-amid-uncertainty","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/eac-pm-growth-amid-uncertainty\/","title":{"rendered":"EAC-PM Meeting &#8211; Strengthening India\u2019s Growth Momentum Amid Global Uncertainty"},"content":{"rendered":"<h2 style=\"text-align: justify;\"><b>EAC-PM Latest News<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Indian PM chaired a meeting of the Economic Advisory Council to the Prime Minister (EAC-PM) to &#8211;<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Review India\u2019s economic outlook,\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Discuss reform priorities,\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Assess external risks such as the West Asia conflict, and\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Examine measures to sustain high economic growth.\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The discussions also focused on attracting foreign capital, improving ease of doing business, and reducing vulnerabilities arising from climatic uncertainties.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Key Outcomes of the Meeting<\/b><\/h2>\n<ul>\n<li><b>Focus on sustaining economic growth:<\/b><span style=\"font-weight: 400;\"> The EAC-PM deliberated on policy measures to maintain and accelerate India&#8217;s growth trajectory despite a challenging global environment marked by geopolitical tensions and economic uncertainty.<\/span><\/li>\n<li><b>Major themes included:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">Strengthening long-term economic transformation.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Deepening structural reforms.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Enhancing Ease of Doing Business (EoDB) and Ease of Living.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Preserving macroeconomic stability while promoting investment-led growth.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Measures to Boost Foreign Capital Inflows<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Tax reforms for foreign investors: <\/b><span style=\"font-weight: 400;\">The government announced significant tax relief measures for Foreign Institutional Investors (FIIs):<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Removal of Short-Term Capital Gains Tax (STCG) on investments in government bonds.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Removal of Long-Term Capital Gains Tax (LTCG) on such investments.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Elimination of withholding tax on interest income earned by FIIs from government securities.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>RBI measures:<\/b><span style=\"font-weight: 400;\"> The Reserve Bank of India (RBI) complemented these reforms by:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Easing norms for banks to mobilise foreign currency deposits.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Reviving the Foreign Currency Non-Resident (Bank) [FCNR(B)] Deposit Scheme, under which the RBI bears exchange-rate hedging costs.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Providing a temporary concessional forex swap facility for Public Sector Undertakings (PSUs) raising External Commercial Borrowings (ECBs).<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Significance<\/b><span style=\"font-weight: 400;\">: These measures are expected to improve liquidity and make India more attractive to global investors.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Potential Foreign Fund Inflows<\/b><\/h2>\n<ul>\n<li><b>Estimated inflows of around $70 billion:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">According to discussions at the meeting, the combined impact of fiscal and monetary measures could attract nearly $70 billion in foreign capital.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">A major share depends on India&#8217;s inclusion in the Bloomberg Global Aggregate Bond Index, which would:<\/span>\n<ul>\n<li><span style=\"font-weight: 400;\">Increase passive investments from global funds tracking benchmark indices.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Expand demand for Indian government securities.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Reduce government borrowing costs by lowering bond yields.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li aria-level=\"1\"><b>Importance of global bond indices:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">India has already been included in:<\/span>\n<ul>\n<li><span style=\"font-weight: 400;\">JPMorgan Emerging Market Bond Index (from June 2024).<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Bloomberg Emerging Market Local Currency Index (from January 2025).<\/span><\/li>\n<li><span style=\"font-weight: 400;\">FTSE Russell Emerging Market Bond Index (from September 2025).<\/span><\/li>\n<\/ul>\n<\/li>\n<li><span style=\"font-weight: 400;\">Inclusion in Bloomberg\u2019s flagship Global Aggregate Bond Index could potentially bring <\/span><b>$20\u201325 billion<\/b><span style=\"font-weight: 400;\"> in additional inflows over about ten months.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Assessment of Global and Domestic Risks<\/b><\/h2>\n<ul>\n<li><b>West Asia conflict:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">No major immediate concerns were expressed regarding its impact on India.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">However, geopolitical developments continue to be monitored due to their implications for energy prices, trade flows, and global financial markets.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>El Ni\u00f1o and monsoon vulnerability:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">A major concern discussed was the possibility of sub-par rainfall due to El Ni\u00f1o conditions.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The need to reduce India&#8217;s dependence on monsoon outcomes.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The discussion highlighted the importance of <\/span><b>climate-resilient agriculture<\/b><span style=\"font-weight: 400;\">, irrigation expansion, water management reforms, and diversification of growth drivers beyond agriculture.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Strong Economic Performance<\/b><\/h2>\n<ul>\n<li><b>Better-than-expected GDP growth:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">The Council took note of encouraging growth data for FY 2025\u201326.<\/span><\/li>\n<li><b>For example,<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">GDP growth of 7.8% in the January\u2013March 2026 quarter.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Full-year provisional GDP growth estimate revised to 7.7%, higher than the earlier estimate of 7.6%.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li aria-level=\"1\"><b>Significance:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">Growth remained robust despite global uncertainties and the overlap of the West Asia conflict with the final month of the quarter.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Strong economic performance reinforced investor confidence and supported positive market sentiment.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>About the EAC-PM<\/b><\/h2>\n<ul>\n<li><b>Nature and composition:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">It is a <\/span><b>non-constitutional, non-permanent<\/b><span style=\"font-weight: 400;\"> and <\/span><b>independent <\/b><span style=\"font-weight: 400;\">advisory body constituted directly by an executive order.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">It has been constituted several times since the independence of India. In the latest occurrence, the council was reconstituted in 2017, and is currently chaired by <\/span><b>S. Mahendra Dev.<\/b><\/li>\n<li><span style=\"font-weight: 400;\">It includes full-time and part-time members from economics, finance, academia, banking, and public policy.<\/span><\/li>\n<\/ul>\n<\/li>\n<li aria-level=\"1\"><b>Functions:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">Provides inputs to the PM on economic and related policy matters.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Advises on macroeconomic policy.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Evaluates economic trends and risks.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Suggests reforms for sustainable and inclusive growth.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Provides analytical inputs on development priorities.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Conclusion<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The EAC-PM meeting underscored India&#8217;s strategy of combining structural reforms, investor-friendly taxation, monetary support measures, and macroeconomic stability to <\/span><b>sustain high growth.<\/b><span style=\"font-weight: 400;\">\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">While geopolitical tensions and climate-related risks remain concerns, strong GDP performance, prospects of higher foreign capital inflows, and continued reform momentum position India favourably for long-term economic development.<\/span><\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><b>Source: <\/b><a href=\"https:\/\/www.pressreader.com\/india\/the-hindu-madurai-9wwb\/20260607\/281840060348457\" target=\"_blank\" rel=\"nofollow noopener\"><b>TH |<\/b><\/a><b>\u00a0<\/b><a href=\"https:\/\/indianexpress.com\/article\/business\/sense-in-pm-eac-meeting-moves-to-attract-foreign-funds-can-get-70-billion-10727693\/\" target=\"_blank\" rel=\"nofollow noopener\"><b>IE<\/b><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The PM chaired an EAC-PM meeting to review India\u2019s economic outlook and assess global risks, including the West Asia conflict.<\/p>\n","protected":false},"author":19,"featured_media":107125,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[8008,60,22,59],"class_list":{"0":"post-107097","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"tag-eac-pm","9":"tag-mains-articles","10":"tag-upsc-current-affairs","11":"tag-upsc-mains-current-affairs-tag","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/107097","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/19"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=107097"}],"version-history":[{"count":5,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/107097\/revisions"}],"predecessor-version":[{"id":107127,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/107097\/revisions\/107127"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/107125"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=107097"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=107097"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=107097"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}