Economic Upturn Already Visible, Growth Likely To Exceed 7 Percent, Says Urjit Patel

News World India | 1
| October 9 , 2017 , 10:21 IST

The Indian economy's growth in the quarter ending June this year was noted as 5.7 percent, the lowest it has been in the past 3 years, resulting in grave concern for the nation and fresh criticisms of the ruling NDA government, whose demonetisation and GST policies were blamed for the economic slowdown.  

Reserve Bank of India governor Urjit Patel recently confirmed that the signs of an economic upturn are already visible and that the growth of the economy is expected to exceed 7 percent in the last two quarters of the year, as per last week's Monetary Policy Report.

ALSO READ: Indian Economy Faces 'Cheer Haran', Says Yashwant Sinha, Won't Keep Quiet

“We have started seeing the upturn. The Nikkei India Services PMI Business Activity Index rose more than 3 percentage points in September over August; the core sector IIP (index of industrial production) saw a 4.9 percent rise in August. If you look at some of the high-frequency data such as automobile and two-wheeler sales, you also see the upturn there,” Patel said.

Regarding the role of the Reserve Bank of India, Patel said that the central bank will support growth, but not at the cost of inflation.

ALSO READ: Facing Criticism For Economic Slowdown, Prime Minister Narendra Modi Hit Back

“Growth is always there in the Monetary Policy Committee’s scheme of things; we don’t lose sight of that but not at the cost of inflation. However, we have to be careful – we should aim at achieving the inflation target without losing sight of supporting economic growth,” said Patel.

“What is important is that in a capital-scarce country like India, the real interest rate needs to be positive enough to encourage healthy growth of financial savings; we get into macro difficulties when real rates on financial savings become negative for a length of time,” he said.