Economic growth may pick up in second half of 2009-10’
The Hindu Business Line, February 21, 2009, Page 5
Our Bureau, Mumbai, Feb 20.
The Indian economy should grow at more than 7 per cent in the financial year 2009-10, said Dr Suresh Tendulkar, Chairman, Economic Advisory Council to the Prime Minister.
Though the growth may be weak in the first half of the next fiscal, it will pick up in the second half, ensuring that the economy grows at more than 7 per cent in 2009-10, he said.
He was delivering the keynote address at a seminar organised by the Maharashtra Economic Development Council.
In the current fiscal, the economy is expected to grow at around 7.1 per cent according to the estimates, he said.
The monetary and fiscal policies that have been introduced will work with a lag and their impact will be seen from the first quarter of 2009-10.
Fiscal consolidation should have taken place during the past five years when the economy was booming, he said. But it did not happen due to the subsidies regime that was followed.
Admitting that fiscal deficit is a problem, he said there is not much room for fiscal measures and the dependence would be much more on the monetary policy.
“Going ahead, we do expect a lower interest rate regime,” he said. It will take some time for banks to cut their lending and deposit rates and move towards lower interest rates, he said. Falling rates will help leverage consumption and lead to a pick up in investment demand. Therefore, the psychology of gloom and doom, which is impacting sentiments of bankers, investors and consumers, is not justified on the evidence available.
However, he cautioned that asset quality of banks may deteriorate in the current scenario though the rise in NPAs might not be significant.
Conceding that small and medium enterprises are facing a credit crunch, he said efforts are being made through a variety of channels to address their concerns.
The Hindu Business Line, February 21, 2009, Page 5
Our Bureau, Mumbai, Feb 20.
The Indian economy should grow at more than 7 per cent in the financial year 2009-10, said Dr Suresh Tendulkar, Chairman, Economic Advisory Council to the Prime Minister.
Though the growth may be weak in the first half of the next fiscal, it will pick up in the second half, ensuring that the economy grows at more than 7 per cent in 2009-10, he said.
He was delivering the keynote address at a seminar organised by the Maharashtra Economic Development Council.
In the current fiscal, the economy is expected to grow at around 7.1 per cent according to the estimates, he said.
The monetary and fiscal policies that have been introduced will work with a lag and their impact will be seen from the first quarter of 2009-10.
Fiscal consolidation should have taken place during the past five years when the economy was booming, he said. But it did not happen due to the subsidies regime that was followed.
Admitting that fiscal deficit is a problem, he said there is not much room for fiscal measures and the dependence would be much more on the monetary policy.
“Going ahead, we do expect a lower interest rate regime,” he said. It will take some time for banks to cut their lending and deposit rates and move towards lower interest rates, he said. Falling rates will help leverage consumption and lead to a pick up in investment demand. Therefore, the psychology of gloom and doom, which is impacting sentiments of bankers, investors and consumers, is not justified on the evidence available.
However, he cautioned that asset quality of banks may deteriorate in the current scenario though the rise in NPAs might not be significant.
Conceding that small and medium enterprises are facing a credit crunch, he said efforts are being made through a variety of channels to address their concerns.
Posts
No comments:
Post a Comment