India's economic growth rate slipped to 6.9 per cent in the second quarter this fiscal, the lowest in nine quarters.
In the backdrop of questions on functioning of microfinance institutions (MFIs), Chief Economic Advisor to the government of India, Kaushik Basu, has called for regulating MFIs for more transparency in their loan contracts with the beneficiaries. However, he also warned that over-regulation of MFIs could imperil their survival.
The government had pegged GDP growth around nine per cent in the Budget for 2011-12.
The government on Friday said inflation continues to be a matter of concern and needs policy action to contain it, although prices are expected to start falling slowly over the next two to three months.
Amid signs of moderation in price rise situation in the country, the January inflation numbers are likely to drop below 7 per cent, said Chief Economic Adviser Kaushik Basu said.
India was ranked 142 last year, but in the latest report it was revised to 134.
"I am not of the view that diesel price deregulation is inevitable and that is the position taken by petroleum ministry right now. Given the inflationary situation right now, we don't want to do that...," chief economic adviser Kaushik Basu told reporters on the sidelines of a CII event here.
Referring to the impact of political turmoil in West Asia, he said the crisis would not hurt the economy unless the crude oil prices rise to 'abnormally' high levels.
Basu also said the economic growth in the second (July-September) quarter is unlikely to be on the higher side.
Economy grew by 8.6 per cent in 2010-11.
The speed at which political statements of doubtful veracity acquire the aura of gospel truth is astonishing. One such "truth" is: coalition compulsions impede economic reforms. Even Chief Economic Advisor Kaushik Basu believes in it. He recently said, "Thanks to coalitional democracy, there is some slowdown in economic reforms and decision-making."
Given that the public is no longer willing to tolerate lack of transparency, politicians will see they have no alternative but to change, feels Raghuram Rajan, economic advisor to the prime minister. Interestingly, Professor Rajan made this hard-hitting speech at an event to release a book in Prime Minister Manmohan Singh's honour.
India may attract investments if the domestic economy continues to strengthen.
Nothwithstanding his chief economic adviser's contention that there would be no reforms till elections in 2014, Pranab says there is no lack of appetite for reforms and that an electorate's support or lack of it can be gauged only in the national polls.
India's ongoing inflation-related worries must not be seen in isolation. Instead, it is a challenge being faced by several emerging economies, the finance ministry's chief economic advisor Kaushik Basu said on Tuesday, while also calling for concerted international action to deal with the issue.
Method will be part of this year's Economic Survey; will help investors in relative comparison.
Kaushik Basu, whose stint at the World Bank ends on July 31, was being looked at as a serious contender, the sources said
The robust economic growth notwithstanding, India has garnered a lowly 119th rank in the United Nation's Human Development Index due to poor social infrastructure, mainly in areas of education and healthcare.
The central bank lowered the Statutory Liquidity Ratio -- amount of deposits banks park in government bonds -- by 1 per cent to 23 per cent.
Inflation is awfully close to 10 per cent, double digits. The main concern is that it has persisted at that level for a long time. The RBI would have to take that persistence into account, suggesting that it is still a problem and vigilance is still required on inflation.
Inflation is awfully close to 10 per cent, double digits. The main concern is that it has persisted at that level for a long time. The RBI would have to take that persistence into account, suggesting that it is still a problem and vigilance is still required on inflation.
India's economic growth, which dipped to 9-year low of 6.5 per cent in 2011-12, is expected to rebound from October, Chief Economic Advisor Kaushik Basu said.
A prime minister-appointed panel on inflation has pitched for opening FDI in multibrand retail in a 'properly regulated fashion', cautioning that the global corporations can also become monopolistic and hike prices.
By 2015, it expects, the growth rate of China would be 7.9 per cent and that of India 7 per cent.
Ministry wants to take views of industry on the issue, before giving its opinion to the Securities & Exchange Board of India.
The sector is in turmoil since the Andhra Pradesh government introduced new legislation to regulate it. The state accounts for a third of MFIs' lending.
CRR is the proportion of deposits each bank must keep in the form of cash.
Describing the current level of inflation as "unacceptable", Chief Economic Adviser in the Finance Ministry Kaushik Basu on Thursday indicated the government will revise downward the growth forecast for 2011-12.
The finance ministry is also collating the data on entire food supply chain to identify the bottlenecks in the process.
A combination of demonetisation, a poorly and hurriedly implemented GST, and more recently the "botched up" lockdown of the economy to control the spread of Covid has brought the economy to its knees.
As food inflation surged to 18.32 per cent, a top adviser in the finance ministry on Thursday agreed with Home Minister P Chidambaram that the government does not have all the tools to control food prices since it is an enabling body.
The price of the vegetable, which is ruling at Rs 60 per kg, went up to Rs 80 per kg last fortnight.
A top Finance Ministry advisor said on Thursday that merely arresting people will not solve the problem of corruption, as the whole issue needs to be tackled in a systematic manner.
The comment assumes importance, since the RBI on Thursday expressed doubts over the efficacy of industrial growth data in mirroring the ground reality.
After a fortnight of being in single digits, food inflation for the week ended July 31 shot up to 11.4 per cent from 9.53 per cent the week earlier on the back of a spike in prices of cereals, milk and fruits.
Inflation, which at one point was below zero, soared to 8.56 per cent in January, surpassing the RBI's year-end projection of 8.5 per cent.
According to latest figures, food inflation stood at 19.83 per cent during the third week of December.
Industrial growth fell for the second consecutive month to a 16-month low of 4.4 per cent in September.
The ministry is awaiting some more data in the next few days to arrive at a precise number.
The biggest achievement of demonetisation is that it has brought about a social revolution against black money and corruption, says Sukumar Mukhopadhyay.
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