‘Government should take hard decisions to spruce up growth’

Former finance minister Manmohan Singh and former chief economic advisor Shankar Acharya have both stated that to sustain the high level of ...

Former finance minister Manmohan Singh and former chief economic advisor Shankar Acharya have both stated that to sustain the high level of growth of 8 per cent, as laid down by the Tenth Plan, the government needs to take some hard decisions.

At the release of the book India’s economy: Some issues and answers, written by Shankar Acharya, Singh said: “Growth rate is stuck between 5.5-6.0 per cent. We need dynamic policies in two commodity producing sectors — agriculture and manufacturing.”

According to Acharya, “this fiscal we may have a 6 per cent growth due to good monsoon but to sustain this growth rate and even higher growth rates some hard decisions are required”. Acharya went on to add that services sector alone cannot propel growth. It would not be possible for the country to attain 8.0 per cent growth unless the manufacturing and agriculture sectors attained higher growth rates, he added.

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Laying stress on equitable growth, Singh went on to add that though according to the vision laid down by the Planning Commission India’s per capita income should be $1,500 in 2020 as compared to $500 now, the real challenge is how to tackle poverty with this high per capita income. “Gainers in reforms must more than compensate the losers and for this fresh policy initiatives are needed”, Singh said.

Meanwhile, chairman of the Twelfth Finance Commission and former governor of RBI Dr C. Rangarajan raised concern on high fiscal deficit of the government. “High level of fiscal deficit may not be showing at present but if it continues at such high level it would be felt in the growth rate”, Rangarajan said.