Centre urged to take steps for tackling core economic issues

The Centre should devise strategies to tame food inflation and high interest rates at the earliest as these affected the common man, according to speakers at a panel discussion on ‘The state of economy', organised by the Southern India Chamber of Commerce and Industry.

D.K. Srivastava, Director, Madras School of Economics, said, “The Indian economy is passing through a difficult phase. The Centre should anticipate what's happening in the Indian economy and plan and develop necessary strategies to over come it.”

Observing that the growth of Indian economy was not sufficient under the present circumstances, he said steps must be taken to address inflation, current account deficit, economic growth, export growth, dip in foreign investment and rising crude oil prices.

While calling for increased investment in strengthening physical infrastructure, Shard Sharma, Chief General Manager of State Bank of India, Chennai Circle, said the fast growth of Indian economy in recent years had placed increasing stress on physical infrastructure.

India invested six per cent of its Gross Domestic Product in infrastructure, whereas China invested about nine to 10 per cent. In the 12 five year plan, India needed a huge sum for infrastructure and the real challenge was to find the sources for it, he said. Dipak Dasgupta, Principal Economic Advisor, Union Ministry of Finance, said his Ministry commenced the Budget consultation process with representatives of the farm sector in New Delhi on Wednesday to learn about the ongoing schemes, the working conditions and its impact on revenue among other things.

“We are here to take stock of the situation, look for changes and how each city has changed over the years. Food inflation matters most as it is the core inflation that affects the common man. With food inflation getting into the negative territory in December, there was good reason to suggest that the country was heading towards lower inflation,” he said.

Mr. Dasgupta said the country was running a long-term marathon to increase its per capita income to $6,500 over the next 20 years from the present $1600.

“It took nearly four decades to raise the per capital income from $100 to $400 with the help of agricultural sector and it was quadrupled to $1,600 in two decades,” he added.

D. Sampath Kumar, Editor, The Hindu Businessline, said though Integrated Child Development Scheme was in force in the country since 1950, about 42 per cent of children under five were severely or moderately underweight. It was either due to a failure of the model or the delivery system or both.

Keywords: food inflation