The Chairman of the Economic Advisory Council to the Prime Minister, C. Ranagarajan, said on Saturday that it was possible to achieve a growth rate of 8-9 per cent by containing inflation, reducing fiscal deficit and focusing on agriculture production and infrastructure.
Delivering the second Ayyadevara HMA Foundation day lecture at Fapcci, Rangarajan said that the latter part of the year is likely to have much better growth than what was witnessed in first three months this fiscal.
There are several pointers for improved industrial productivity even though the growth has not been significant so far, he felt.
The country needs to address key issues of taming inflation, bringing down fiscal deficit and containing current account deficit to a reasonable level.
Sectors such as agriculture and infrastructure, where power is a key aspect, play a major role in bringing down the inflation. Increased farm produce automatically brings down inflation to a large extent. Power sector in particular has an extremely positive influence on the economy, he felt.
Citing the power sector, he said that China adds capacity in one year which is equivalent to what India plans to add during a five year plan.
Referring to unusually high imports of gold which was about $60 billion last year as against average $30 billion to $40 billion, he said that people tend to hedge their money by gold when they are worried about other savings.
“Therefore, we need to evolve financial products that match the security and returns that gold offers as a hedge,” he felt.
“I am optimistic that the country’s economy will do much better than the last year’s overall growth,” he felt.