Raghuram Rajan, chief economic advisor to the Finance Minister, addressed the press after the Economic Survey was tabled in Parliament today.
Here are the highlights:
- Have addressed major economic challenges: Raghuram Rajan
- Government revenue could not keep pace with spending due to economic slowdown
- Household financial savings also fell short, says Raghuram Rajan
- Important to bring twin deficits down: Raghuram Rajan
- Double-digit retail inflation worrying: Raghuram Rajan
- Lower inflation will help improve financial savings
- Indian economy decelerated to 5.5% this fiscal
- Urgent need for macroeconomic stabilization
- We are batting on a sticky wicket, but the Sun will dry out the pitch, says Rajan
- Need to reduce borrowings
- Low inflation will help a lot
- Remove bottlenecks to large investments and create employment
- Need to encourage SMEs
- Need to reduce transaction costs for investors
- Contain inflation through monetary and supply-side measures
- Possible implementation of GST would be a huge positive
- Direct benefit scheme would reduce expenditure and distortions
- Fighting inflation a joint effort of government and RBI
- Greater fiscal consolidation and agricultural production will help RBI cut rates
- Harder to predict the path of GDP
- We have to reduce the cost of doing business and create more human capital
- Should not be obsessed with point forecasts as they do generally go wrong
- Economic forecast is an art rather than a science
- Headwinds from outside India will hopefully diminish this year
- China, US and Japan unlikely to drag India's growth down any further this year
- Europe is the only remaining factor, so India needs to focus more on its domestic policies
- 2-2.5 per cent of the GDP as current account deficit is a reasonable number
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