‘Country will get back to 9 pc growth rate soon’
Inflation in the Indian economy this year might have drawn much scepticism from all quarters.
But the Chairman of the Economic Advisory Council to the Prime Minister, Dr C Rangarajan dismissed pessimism about India’s economic policies, saying the country has the potential to jump back to a growth rate of nine per cent very soon.
At an interaction with the students of Kristu Jayanti College here on Tuesday, Dr Rangarajan felt the new economic policy has not diminished the State’s role. “It allows competition to increase production, but has not diminished government’s role. The State’s involvement in the manufacturing sector might have come down, while it continues to invest in the service sector,” he said. If it is ensured that the current account deficit is no more than 2.5 per cent of GDP and if the fiscal deficit is maintained at a reasonably low level, it would contribute largely to increase the growth rate. There are indicators that the inflation will come down and measures have to be taken to bring it down.
He said the petrol price hike was inevitable. “Since we depend on imports for 80 per cent of oil requirements it becomes imperative that the retail prices are in coherence with the international market,” he added.
