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India’s economic growth to pick up soon: RBI Governor

07 May 2014 Evaluate

Expressing optimism on India's economic growth, the Reserve Bank of India (RBI) Governor Raghuram Rajan has asserted that Indian economy’s growth rate will pick up in the near future. The Governor added that Indian economy, which has been growing at a flat growth rate at around 5 percent over the past two fiscal years will witness beyond 5 percent growth soon.

Reiterating his views that long term economic growth is linked with the curbing inflation, Raghuram Rajan emphasized that stimulating growth and controlling inflation are not opposed to each other. The RBI had already said that prevailing high inflation in the country continue to pose challenge to economic growth over the medium to long term through impacting people savings. Only in case of low and stable inflation level, the monetary policy can contribute significantly to revive consumption and investment in the country.

The Reserve Bank of India (RBI) has raised lending rate three times since September’13 to tame price rise through cooling demand. Although tight monetary stance helped to quell some prices pressure, the apex bank’s move is adversely impacting the country’s economic growth. At present, Indian economy is struggling and its growth has slowed down to a decade low at 4.5 percent in FY13 and 4.6 percent during the first three quarter of FY14. The Central Statistics Office (CSO) has expected that Indian economy to grow at 4.9 percent in FY14.

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