Make stronger reforms, slash subsidies for economic recovery: Rangarajan

 
Underlining the necessitate for pump-priming the wealth by increasing reforms and decoration subsidies, Prime Minister's Economic consultative committee Chairman C Rangarajan on Monday said if India grew at 8 to 9 per cent every year, per capita GDP would rise to $10,000 by 2025.

He said that if this expansion rate was achieved "then India will also shipment from life form a squat profits to a focal point profits realm".

The renowned economist and previous RBI governor was talking on the topic "Indian Economy: instantaneous Challenges and middle Term Concerns" while delivering a sermon on NALCO's institution day.

Emphasising the need to conquer the present low expansion phase as rapidly as probable, Rangarajan said increase was the reply to many of the country's socio-monetary problems and more than a few schemes meant at expansion the pedestal of increase had been launched lately.

Stating that raising reserves and asset might take India back to the extremely elevated levels of expansion seen previous, he said calming price rises, containing present explanation shortage and ensuring economic consolidation were the main tasks requiring abrupt awareness.

While pains must be complete to hoist returns-GDP proportion, it is vital to check expenditures, above all subsidies which need to be pruned, well focussed and prioritised," Rangarajan says adding up "it is up to the government to choose which subsidies must take partiality over others."

What is wanted is to have a fasten on the quantum of subsidies to be provided as a quantity of GDP or of government returns, he said referring to government's hint at dipping subsidies from 2.6 per cent of GDP in 2012-13 to 1.6 per cent of GDP in 2015-16.

Inflation may ease to 6.5% in December: Rangarajan

 
Mumbai: A fall in vegetable prices is likely to ease headline inflation and retail inflation to 6.5 percent and 9.20 percent respectively in December, Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan said on Saturday.

"Some of the things that have really pushed up inflation are vegetables like onion prices, which have crashed in December. Therefore when December number comes in mid January, we will see retail inflation coming down by 2-2.5 percentage from the current level of 11 percent or so. There could be a decline in wholesale price index ... Could be the order of 1 percentage," Rangarajan told reporters on the sidelines of the silver jubilee celebration of Indira Gandhi Institute of Development Research.

Wholesale price-based inflation (WPI) accelerated to 14- month high of 7.52 percent in November, while retail inflation quickened to eight-month high of 11.24 percent during the month.

Going forward, Rangarajan said, the declining trend in inflation will continue and WPI may ease to 6.5 percent by March-end.

"The RBI has estimated WPI to be around 6.5 percent by March end. That is the number we are looking at. We will see a decline in December and perhaps it will continue," he said.

Quoting an econometric study, the former RBI governor said the threshold inflation level is around six percent, but there is a need to look at the slightly lower as the level is much higher than what many other countries in the world... advanced countries treat as the acceptable level of inflation.

Rangarajan says inflation may ease to 6.5 per cent in December

 
A fall in vegetable prices is likely to ease headline inflation and retail inflation to 6.5 per cent and 9.20 per cent respectively in December, Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan said on Sunday.

"Some of the things that have really pushed up inflation are vegetables like onion prices, which have crashed in December. Therefore when December number comes in mid January, we will see retail inflation coming down by 2-2.5 percentage from the current level of 11 per cent or so. There could be a decline in wholesale price index ... could be the order of 1 percentage," Rangarajan told reporters on the sidelines of the silver jubilee celebration of Indira Gandhi Institute of Development Research.

Wholesale price-based inflation (WPI) accelerated to 14-month high of 7.52 per cent in November, while retail inflation quickened to eight-month high of 11.24 per cent during the month.

Going forward, Rangarajan said, the declining trend in inflation will continue and WPI may ease to 6.5 per cent by March-end.

"The RBI has estimated WPI to be around 6.5 per cent by March end. That is the number we are looking at. We will see a decline in December and perhaps it will continue," he said.

CAD will reduce below $70 billion: Rangarajan

Stating that there has been improvement in the trade account, Chairman of the Economic Advisory Council to Prime Minister C Rangarajan on Tuesday said the Current Account Deficit (CAD) will go down well below $70 billion.

Pointing out that in August and September, India's exports showed a double digit growth rate, Rangarajan said at an event here that India's trade deficit in the first half of this year was $80 billion as compared to $92 billion in the previous year.
If the present trend in exports and imports continue, the overall CAD will reduce even lower than $70 billion.

Noting that the Indian rupee over the last few weeks had remained stable at around 61-62 against the US dollar, he said the rupee was well corrected for inflation differential.

Referring to the USA's indication of tapering on May 22 and the resultant fall in capital flows, he said this affected capital inflows not only to India but to all the emerging economies including Brazil as investments were moved to the USA.

However, now, there has been a change and investments flows have turned positive, he said.