Rangarajan calls for short-term Capital inflows to boost Growth
“The Indian economy is expected to grow at 6.5 per cent in the current fiscal. If India grows at 8-9 per cent per annum, we will graduate to the level of a middle income country by 2025″, said the Chairman of Prime minister’s Economic Advisory Council (PMEAC), Dr. C. Rangarajan, while releasing the Economic Review for 2012-13 in New Delhi.
On this occasion, Mr. Rangarajan said, Agriculture sector will growth at 3.5 per cent with an expectation of a normal monsoon. He pegged industrial growth at 4.9 per cent.
Mr. Rangarajan said, economic growth rate had slipped to decade’s low of 5 per cent in 2012-13 mainly on account of the impact of the global financial woes.
On current account deficit (CAD), Mr. Rangarajan said, the Current Account Deficit is a concern and put it 4.7 per cent for the current financial year.
He hoped that with inflation coming down, peoples’ appetite for gold, the import of which along with petroleum products had added to the pressure on CAD, will also diminish.
The PMEAC Chairman advocated policy actions for achieving higher economic growth, including speedy project clearances, control over fuel subsidies, reducing current account deficit, and reforms in Agricultural marketing and supply chains.
Terming power availability as extremely important for the economy, Mr. Rangarajan favoured boosting domestic coal production to meet energy needs, which will also help in reducing coal import bill.
Mr. Rangarajan said, liberalising FDI may stimulate investment. He also said that high gold, coal and crude oil imports remain a concern and called for steps to boost capital inflows in the short term to boost the growth of Indian economy.