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Former RBI chief says rising inflation a worry and efforts should be made to bring it down to 4%-5%
Mumbai: Chairman of the Prime Minister’s Economic Advisory Council C Rangarajan today said he expects the Indian economy to grow by 8.5% in FY12, on the back of expansion in the services sector and industry, though he hinted that agriculture may not be such a big contributor. He also described rising inflation as a worry and said it should be cut to 4%-5%.
“It is my estimate that the Indian economy will grow at 8.5% in 2011-12. The growth from agriculture may not be so high, but services and industry compensate for that,” Dr Rangarajan said, during his address at the 26th Skoch Summit in Mumbai. He continued, “It is prudent to aim at a growth rate of between 9% and 9.5%. Pushing the economy beyond that will run into problems.”
In its monetary policy for 2011-12 announced last month, the Reserve Bank of India (RBI) has projected the economy to grow by 8% this fiscal, lower than the government’s original forecast of 9%, PTI reports.
On inflation, Dr Rangarajan said, “In the early decades of independence, the argument was that inflation was endemic in economic growth and led to very steep increases in prices. We should not let that happen in the years of high growth... (We must) re-anchor the inflationary expectations to the 4-5% comfort zone.”
Dr Rangarajan also cited rising inflation as a “disturbing element”. On food inflation, he said, “The last few months have shown a declining trend in vegetable prices and it is expected that inflation will come down in the coming months, even though it may remain at a high level for some time.”
Food inflation shot up to 8.55% for the week ended 14th May, the highest level in four weeks, as prices of fruits, cereals and protein-based items escalated.
The prime minister’s economic advisor was hopeful that overall inflation would come down to 6%-6.5% by March 2012.
The Gandhian, who led a similar protest in April that built up into a nationwide campaign, says this time assurances will not be acceptable and government will have to produce action
Ralegan Siddhi, Maharashtra: Anna Hazare, the face of the anti-corruption movement in the country, has accused the government of cheating civil right activists on the drafting of the Lokpal Bill, and he has extended his support to yoga guru Baba Ramdev's planned hunger protest against corruption, saying that he would join the agitation.
The Gandhian leader said that the government lacks intent to root out corruption from the system. “I will join Baba Ramdev on 5th June. The fight is against corruption. The government has tried to cheat us. The government had assured us that they would look into our demand,” he said, and added that he would hold discussions with Ramdev on the way forward, PTI reports.
Mr Hazare said the government has “cheated” civil rights activists on the Lokpal Bill and people have realised the betrayal by the government. “I will support Baba Ramdev so that the government does not do what it did when we were fighting. We will fight together against corruption,” he said. “Henceforth, we will not be content with oral assurances on the issue of weeding out corruption.”
Mr Hazare also pointed out that the yoga guru has a standing in public life and that wherever he goes people gather to hear him.
Mr Hazare’s remarks came after finance minister Pranab Mukherjee accompanied by union ministers Kapil Sibal, Pawan Kumar Bansal and Subodh Kant Sahay held talks with Ramdev on Wednesday, to persuade him to give up his indefinite fast on corruption, but the yoga guru said that he would go ahead with it from 4th June.
The government is anxious to prevent a repeat of the situation that developed when Mr Hazare led a similar hunger protest in April, that built up into a nationwide campaign for a strong Lokpal, but Ramdev does not appear to be in a mood to step back unless the government takes “action” instead of simply giving “assurances” on the matter of bringing back black money stashed abroad.
Mr Hazare said he believed that everybody should come under the ambit of the Lokpal Bill. He said the government was trying to get its act together now, only after Ramdev announced his agitation would begin on 4th June. “For so many days we have been demanding (immediate implementation of the Lokpal Bill). Why did the government not listen to us. Now the government is running just because time has to come to sit on fast,” he said.
“Baba Ramdev has been raising the issue of black money from so many days. Why did the government not think of doing something on the issue? People have now come to know what the intentions of the government are,” Mr Hazare said.
He underlined that the fight against corruption would continue till the demands are met. “Now no more hollow assurances and oral promises. What we want is action and the fight against corruption will continue throughout the country till we get what we want,” he said.