SEBI Reg. Investment Advisor

Download App

MoneyWorks4Me

Need to take more economic reforms, reduce subsidies to recover economic growth: C Rangarajan

07 Jan 2014 Evaluate

In order to boost the economy’s growth, Prime Minister's Economic Advisory Council Chairman C Rangarajan has expressed a pressing need for intensifying reforms and trimming subsidies adding that if India grew at 8 to 9 percent each year, per capita GDP would rise to $10,000 by 2025, which will also transit India from being a low income to a middle income country. Highlighting that increasing savings and investments could take India back to the very high levels of growth seen earlier, Rangarajan emphasized the need to overcome the current low growth phase as quickly as possible. He added that economic growth reflects the effect of recently launched country's socio-economic problems and several schemes aimed at broadening the base of growth.

Referring to the deteriorating macro-economic indicators, Rangarajan added that trimming inflation, containing current account deficit (CAD) and ensuring fiscal consolidation were the major tasks requiring immediate attention. To raise revenue-GDP ratio, it is imperative to check expenditures, particularly subsidies which need to be pruned, well focused and prioritized. Meanwhile, the government also decided to reduce subsidies from 2.6 percent of GDP in 2012-13 to 1.6 percent of GDP in 2015-16. Regarding the high inflation, PMEAC Chairman asserted that price stability is a pre-condition for sustained high growth and added that monetary policy and fiscal policy have to play their part in containing overall demand pressures. High return on savings and investment can take us back to the very high levels of growth, therefore the government should expedite the implementation of projects.

Concerned over the widening CAD of the country due to gold imports, Rangarajan stated that gold imports at 54 billion dollars has remained high and the country must dissuade people from being attracted to the yellow metal. Over the next few years, India needs to keep the CAD at a more comfortable level of 2.5 percent of GDP. India’s CAD touched a record high of 4.8 percent of GDP in 2012-13.

Rangarajan highlighted two sectors such as farm and power sector, which are posing concerns for medium term growth for Indian economy. He stressed that the last three years have clearly shown how a decline in agricultural production can cause serious distortions in the economy, therefore necessary steps must be taken to revitalise traditional crop agriculture which is vital to food security and farm income. Agriculture and allied activities must grow at 4 percent per annum in India. On power Sector, PMEAC Chairman added that in order to add 75,000 mw generation capacity, an aggressive path is imperative while the constraints like availability of coal, land acquisition and environmental issues need to be tackled for capacity expansion.

About MoneyWorks4Me

MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.

Our Vision

To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.

What Makes MoneyWorks4Me Different

Our Approach: Ensuring compounding work its magic on client portfolio.

MoneyWorks4Me ensures this through:

×