DNA, January 12, 2015

Special Correspondent
Even as the country’s growth prospects looked optimistic with the gross domestic product (GDP) poised to grow at 8.5 per cent, area of concern was the continuing inflationary trends which could not be reigned in so far, said RBI Deputy Governor Subir Gokarn.

“India should take careful steps and progress gradually to tackle inflation”, Dr.Gokarn observed speaking on the “State of Indian economy” here on Monday. The event was organised as a part of the series of “CUTS Thought Leadership” to provide a better understanding on contemporary issues facing the Indian economy. CUTS International is a non-governmental think-tank on economic and social issues with its headquarters in Jaipur and resource centres in India and abroad.

Dr. Gokarn said the world was in the process of recovering from recession and the patterns varied in developed and the developed countries. Stressing on the need to have a more robust financial sector, he said that the Indian economy provided the necessary resilience to tide over the recession. India was presently in a comfortable stage with real GDP expected to grow by 8.5 per cent this year, he noted.

However, the situation was not fully satisfactory with the inflation, especially that of food products, remaining high, Dr. Gokarn said. He also felt that there was a need to check sharp fluctuations in capital inflows.

Adarsh Kishore, former Union Finance Secretary, delivering the opening address, said huge disparities still existed between urban and rural India. Expressing concern over rising inflation, he said the target should be to bring it down to around five per cent.

Dr. Kishore termed institutional framework and sustainability as great assets for India. “It is because of this that the Indian economy is one of the fastest moving along with China, Brazil and Russia”, he said and stressed on the need to link the poor to the supply chain instead of just perceiving them as recipients of government’s largesse of welfare programmes.

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