Sunday, March 3, 2013

6.5% growth achievable

Commenting on the Union Budget 2013-14, Planning Commission Deputy Chairman Montek Singh Ahluwalia said the biggest challenge right now is huge micro imbalance, very large fiscal deficit which is mirrored in balance of payment by large current account deficit. Now we want to get that in balance, not get the risk of running out of foreign inflows, is important to reduce the fiscal deficit. The fiscal deficit target of 4.8% of the GDP next fiscal was achievable. Registering 6.5% economic growth would be achievable in the backdrop that India's last decade long term average GDP growth of 7.4%.

Commenting on inflation and the outlook for economic growth, Reserve Bank of India Governor Duvvuri Subbarao said inflation is still high, the balance of payments is under stress and decline in investment is a worry because today’s investment is tomorrow’s production capacity. The country can only achieve growth by not just implementing economic reforms but governance reforms in all sectors of the economy.

The rupee fell by a whopping 53 paise to close at nearly two-month low of 54.89 against the US dollar and on Monday it is expected to touch 55 against the dollar.

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