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As India’s economy stagnates, PM Modi revives UPA’s Economic Advisory Council

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Narendra Modi

[vc_row][vc_column][vc_column_text]The five-member panel will be headed by Bibek Debroy and include Surjit Bhalla, Rathin Roy, Ashima Goyal and Ratan Watal

Three years into his government, hit by predictions of an impending doom in the Indian economy – wounded severely by demonetisation and a hasty rollout of the Goods and Services Tax (GST) regime – Prime Minister Narendra Modi has revived the UPA government’s ‘think-tank’, the Economic Advisory Council, to help him steer the nation back to a growth trajectory.

Of course, the EAC predictably has as its members economists who are more aligned with the Modi regime’s ideas of economic reform and development, unlike the several panels that existed for different spans of time under former Prime Minister Dr Manmohan Singh’s UPA government wherein members were often picked not purely for their ideological affiliations with the ruling party but for their expertise in different fields of the economy.

Nevertheless, Modi’s decision to revive the EAC with NITI Aayog member Bibey Debroy as its head is a significant move that – despite claims by the Prime Minister, finance minister Arun Jaitley, other senior ministers and BJP members – can be seen as the Prime Minister’s tacit admission of the fact that India’s growth story has taken a hit and needs expert ‘advise’ for revival.

Besides Debroy, who as member of NITI Aayog (Prime Minister’s redesigned version of the erstwhile Planning Commission) worked on several ideas on economic reforms that Modi held dear, other EAC members are Surjit Bhalla, development economist Rathin Roy and macro-economics expert Ashima Goyal. Ratan Watal, principal advisor to the NITI Aayog and a former finance secretary, will serve as the member-secretary of the panel.

The EAC members, all of whom seem well aligned with Modi and finance minister Arun Jaitley’s idea of a making India’s economy more liberal (read: pro-market, pro-private sector and disinvestment), are expected to work closely with the NITI Aayog and senior bureaucrats of the Union finance ministry, including the government’s chief economic adviser Arvind Subramaniam and principal economic adviser Sanjeev Sanyal.

“Addressing issues of macroeconomic importance and presenting views thereon to the Prime Minister. This could be either suo-motu or on reference from the Prime Minister or anyone else,” is the key term of reference for the panel.

Taken at its face-value, the EAC appears to be the perfect team of economists who can draft a blueprint for reviving investor sentiment in the nation’s economy and suggest policy reforms that are in line with Modi’s vision (the this may be a matter of concern for many given the country’s experience in dealing with the Prime Minister’s demonetisation idea).

However, it may be worth exploring whether the constitution of the EAC – belated as it is – at a time when the government has less than two years left in power, will actually have enough time to realize its objectives. More importantly, given the slew of Assembly elections due across the country in the run up to the mega general election scheduled for April-May 2019 and the political compulsion of governments to adopt populist economic policies over pragmatic ones in state/union budgets that precede these polls, it remains to be seen whether the EAC will actually accomplish anything more than just filing copious reports on its recommendations.

The decline in India’s economy – despite contrary claims made by Modi and Jaitley – is more than evident and the recent figure of GDP growth rate declining to 5.7 per cent in the last quarter – falling to a three-year low – endorses this notion comprehensively. Besides just boosting figures and data, which mean little to a common man who doesn’t understand economic jargon, the major challenge for the EAC would be to suggest way of boosting India’s stagnant job market. All indications are that the Congress and opposition’s attack on the BJP during polls would include lack of jobs and the resultant unemployment as potent ammunition.

Modi doesn’t have the drawback that his predecessor, Dr Manmohan Singh, was constantly bogged down by – having to accommodate views of the National Advisory Council headed by UPA chairperson Sonia Gandhi and comprising activists who wanted the government to focus more on social empowerment, often at the cost of economic progress. But given the Prime Minister’s style of functioning, the bigger question seems to be whether he will actually be open to advise given by his council of economic advisors.[/vc_column_text][/vc_column][/vc_row]

India News

Didn’t violate party line: Shashi Tharoor defends stand on Operation Sindhoor

Shashi Tharoor says his stance on Operation Sindhoor was driven by national interest and insists he did not violate the Congress party line.

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Congress MP Shashi Tharoor says his views on Operation Sindhoor were guided by national interest and aligned with India’s security priorities

Congress MP Shashi Tharoor on Saturday said he has never crossed the Congress party’s stated positions inside Parliament, asserting that his only principled public disagreement was related to Operation Sindhoor.

Speaking during a session at the Kerala Literature Festival, Tharoor said he had taken a firm stand on the issue and remained “unapologetic” about it. His remarks come amid recent reports highlighting differences between him and sections of the party leadership, with speculation around his dissatisfaction over not being adequately acknowledged at a recent event in Kochi and alleged attempts by state leaders to sideline him.

Clarifying his position, Tharoor said that as a writer and observer, he had penned a newspaper column after the Pahalgam incident, arguing that the attack should not go unpunished and calling for a limited kinetic response. He added that while India’s primary focus remains development, the country should not be drawn into a prolonged conflict with Pakistan.

According to Tharoor, any response should be restricted to targeting terrorist camps rather than escalating tensions. He noted that he was surprised when the government eventually took steps that mirrored the approach he had outlined.

Referring to Jawaharlal Nehru’s famous words, “Who lives if India dies?”, Tharoor said that when the country’s security and global standing are at stake, national interest must take precedence over political differences.

He added that while political parties may disagree on various issues in the process of strengthening democracy, India must come first whenever core national interests are involved.

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India to start first commercial semiconductor chip production in 2026, says Ashwini Vaishnaw

India is on track to begin its first commercial semiconductor chip production in 2026, with pilot production already underway and investments nearing $90 billion, according to Union Minister Ashwini Vaishnaw.

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Union Electronics and Information Technology Minister Ashwini Vaishnaw on Friday said India remains on schedule to begin commercial semiconductor chip production in 2026, in line with the targets outlined under the India Semiconductor Mission launched in January 2022.

Speaking to media, the minister said the government had committed to starting commercial production within five years of the mission’s launch and that the timeline is being met.

“The first commercial production will begin in 2026. Four semiconductor plants are expected to start operations this year, while pilot production has already begun at three plants in 2025,” Vaishnaw said.

Semiconductor ecosystem taking shape

The minister said India’s semiconductor ecosystem is developing rapidly, with global equipment manufacturers setting up operations in the country and a strong materials manufacturing base emerging alongside.

He added that the talent pipeline is progressing faster than expected. Against a target of training 85,000 skilled professionals over 10 years, India has already trained around 65,000 people in just four years, he said.

Vaishnaw noted that several milestones under the first phase of the Semiconductor Mission are either on track or ahead of schedule, reflecting growing confidence in India’s manufacturing ambitions.

Investments near $90 billion, more expected

On the investment front, the minister said total investments in the semiconductor sector have reached close to USD 90 billion so far. He added that committed investments could rise to around USD 150 billion as India approaches the upcoming AI Impact Summit scheduled to be held in New Delhi from February 16 to 20.

According to Vaishnaw, global semiconductor players are increasingly supportive of India’s efforts and are keen to participate in the country’s expanding chip manufacturing ecosystem.

ASML equipment for Dholera fab

Highlighting the importance of advanced manufacturing technology, Vaishnaw spoke about his visit to Veldhoven in the Netherlands, where he visited the headquarters of ASML, the world’s leading supplier of lithography equipment used in semiconductor manufacturing.

He said lithography remains the most complex and precision-intensive process in chip production and confirmed that India’s upcoming semiconductor fabrication facility in Dholera, Gujarat, will use equipment supplied by ASML.

Vaishnaw said the interest of global equipment manufacturers in India reflects the country’s strong design capabilities, large talent pool and consistent policy environment.

India’s progress in AI and global confidence

The minister also highlighted India’s growing role in artificial intelligence, stating that the country is developing strength across multiple layers of the AI stack, including applications, sovereign models, chips and infrastructure.

He said global industry leaders expressed strong confidence in India’s semiconductor and AI journey during discussions at the World Economic Forum in Davos, with many indicating their willingness to contribute to India’s long-term goals.

The India Semiconductor Mission, approved by the Union Cabinet in December 2021 with an outlay of Rs 76,000 crore, aims to support semiconductor fabrication, display manufacturing and chip design, and position India as a global hub for electronics manufacturing and innovation.

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Rain in Delhi, snowfall in Kashmir as north India sees weather shift

Rainfall in Delhi and fresh snowfall in Kashmir and Manali point to a significant weather shift across north India, impacting flights, trains and temperatures.

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Snowfall

Light to moderate rainfall was recorded across several parts of Delhi on Friday morning, accompanied by thunderstorms, lightning and strong winds. Cloudy conditions are likely to persist through the day, according to weather updates.

The India Meteorological Department issued an orange alert early morning, warning of short but intense spells of rain along with moderate thunderstorm activity in multiple pockets of the city.

Areas such as Narela, Bawana, Alipur, Burari, Kanjhawala, Rohini, Badli, Model Town, Azadpur, Pitampura, Mundka, Paschim Vihar, Punjabi Bagh, Rajouri Garden, Jaffarpur, Najafgarh and Dwarka are expected to be affected. These regions may witness lightning and fast-moving winds along with rainfall.

The rain is likely to provide relief from prevailing temperatures in Delhi and nearby regions.

Fresh snowfall blankets Kashmir Valley

Several areas in the Kashmir Valley, including the popular ski destination of Gulmarg, received fresh snowfall as a strong western disturbance impacted Jammu and Kashmir. Snowfall began late Thursday evening in Gulmarg, located in Baramulla district.

High-speed winds were also reported across Srinagar and other plains of the valley.

Due to the continuing snowfall, authorities at Srinagar Airport have indicated that flight operations may take longer than usual to return to normal. Train services were affected, and the Srinagar–Jammu national highway was blocked following snow accumulation.

Himachal Pradesh’s Manali also witnessed fresh snowfall, covering the hill town in a white blanket and bringing cheer to residents and tourists.

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