See FY14 GDP growth higher on reform steps: Rangarajan

Moneycontrol Bureau

"I believe growth rate in the current fiscal will be higher", said C Rangarajan, chairman of the Prime Minister's Economic Advisory Council (PMEAC). He was confident on the signs of growth in the economy coming back. The impact of past decisions of the government will be seen in the coming months, he added. Rangarajan was speaking on "Is good economics bad politics" at the Think India Dialogue organised by Network 18. Also read: Unsure if June quarter will see 3.6% CAD: Shankar Acharya Speaking on investment patterns in India, Rangarajan said that the savings and investment rate in India continued to be around 30 percent. Although it has seen a fall, but we must capitalise on that, he added. He said that the reasons for growth slowdown in the past years had to be assessed. "We can't blame India's slow growth in the last two years on external factors alone, but the global economic slowdown has had its impact" expressed Rangarajan. On the fiscal consolidation plans of the government, he said that the council had laid out a roadmap for it. He added that there will be increased focus on the development of infrastructure. Rangarajan attributed the high inflation rates last year to the failure of monsoon in 2009-10 led. He said that he was now happy that it had tamed down to 4.7 percent in May. On the potential for an interest rate cut due to this, he said that the external conditions did not permit a rate cut by the Reserve Bank of India (RBI). He also stressed on the need to create a more competitive environment in India. The structure of the economy has not deteriorated since 2010, he added.