GDP unlikely to drop below 5%, policy reforms supports: Raghuram Rajan

Amid strong string of reform measures, which boosted India’s investment appeal globally, the Centre's new Chief Economic Advisor Raghuram Rajan opined that GDP might not fall below 5% backing the strong strategy of the government. Previously, Rajan had commented on the possibility of GDP growth to dip below 5% and urged for aggressive reform measures to trigger economic growth.

Rajan noted that the international perception about the country has changed, albeit painful measures it assured government’s capability to lead country further. He pointed that the government’s through these measure is aiming to change the ground reality that the nation is also affected by global economic woes, hence has to bear its outcomes too. Rajan expressed hopes that private sector growth projections which were steeply going down since several months are likely to improve.

The Chief Economic Advisor also confirmed that the nation’s economic situation is nowhere near the balance of payments crisis of 1991, though large fiscal deficits and large current account deficits has to be tackled properly. Also suggested for curtailing misdirected subsidies and including better directed subsidies to effectively manage the budget and trim the burden on central funds. While, his predecessor Kaushik Basu advocated RBI’s important role in reviving growth and pointed out that its inflation-fighting strategy is not working as expected.