While slow growth is seeing the bottom, inflation and deficit are high, says C Rangarajan, Chairman, Economic Advisory Council of the Prime Minister.
Speaking at a function organised by Hindustan Chamber of Commerce in Chennai today he said that the global economy is in bad shape and American economy has shrunk but it is improving.
Rangarajan, who is also the former governor of Reserve Bank of India said that policies since 1991 are in right direction.
He added, in 2010-11 growth rate was revised to 9.3% and in 2011-12 economic activity decelerated and growth was revised to 6.2%.
Manufacturing sector grew at 2.7%, output of coal and minerals fell.
Oil price continues to be high, said Rangarajan.
In 2012-13, monsoon didn’t behave well in the beginning but picked up later.
Manufacturing was bad in April-September, but in October it picked up and in November it was bad again. This year the growth projection is around 5.5-6%.
Rangarajan said actions of Government have started showing change in bid sentiment.
He said that 2013-14 is expected to be better than 2012-13 and we need to get back to 8-9% growth rate.
Taming inflation, fiscal consolidation, improving balance of payments are key, Rangarajan also said monetary and fiscal policy have a role in containing inflation.
There are signs of Inflation easing and fiscal deficit could be 5.3% this year.
Current account deficit could be at same level as last year or slightly higher, said Rangarajan.
