RBI guv sees swifter recovery
The Economic Times, March 27, 2009, Page 16
Our Bureau NEW DELHI
RESERVE Bank of India (RBI) governor D Subbarao on Thursday said that the next fiscal (2008-09) will be more challenging than the present fiscal in terms of maintaining a positive growth momentum.
He, however, added that India’s turnaround would be steeper and swifter once there is a turnaround in global economy.
“We believe that growth moderation might be steeper than we had thought earlier. I believe 2009-10 is going to be a more challenging year than 2008-09,” Mr Subbarao said at a conference organised by Confederation of Indian Industry (CII).
Growth in present fiscal was sustained because of development of the brownfield projects (projects which were up for expansion) while most of the industrial houses put the greenfield (new) projects on hold. This may have an impact on the world’s economy in the month’s to come, the RBI chief said.
On the possibility of deflation in Indian economy Mr Subbarao ruled out any possibility of a sustained deflation. He said that inflationary tendencies are likely to be healthy in the coming days.
“Consumer Price Index (CPI) is still elevated. There are four indices of CPI. Some of them are still in double digits. Our own view is that there is no fear of sustained deflation in India,” he said. On the need of a further stimulus package Mr Subbarao said that there is a need that the policy-makers and government should first allow the first two packages to percolate completely.
“There is a cost to support further stimulus, there will be pressure on the credit market. I personally think we should give them (earlier packages) time to run for the moment,” he said.
The Economic Times, March 27, 2009, Page 16
Our Bureau NEW DELHI
RESERVE Bank of India (RBI) governor D Subbarao on Thursday said that the next fiscal (2008-09) will be more challenging than the present fiscal in terms of maintaining a positive growth momentum.
He, however, added that India’s turnaround would be steeper and swifter once there is a turnaround in global economy.
“We believe that growth moderation might be steeper than we had thought earlier. I believe 2009-10 is going to be a more challenging year than 2008-09,” Mr Subbarao said at a conference organised by Confederation of Indian Industry (CII).
Growth in present fiscal was sustained because of development of the brownfield projects (projects which were up for expansion) while most of the industrial houses put the greenfield (new) projects on hold. This may have an impact on the world’s economy in the month’s to come, the RBI chief said.
On the possibility of deflation in Indian economy Mr Subbarao ruled out any possibility of a sustained deflation. He said that inflationary tendencies are likely to be healthy in the coming days.
“Consumer Price Index (CPI) is still elevated. There are four indices of CPI. Some of them are still in double digits. Our own view is that there is no fear of sustained deflation in India,” he said. On the need of a further stimulus package Mr Subbarao said that there is a need that the policy-makers and government should first allow the first two packages to percolate completely.
“There is a cost to support further stimulus, there will be pressure on the credit market. I personally think we should give them (earlier packages) time to run for the moment,” he said.
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