The Chairman of the Prime Minister's Economic Advisory Council, Dr C Rangarajan, expects the Indian economy to grow at 9 per cent in 2011-12 considering that the country's savings rate had touched 34 per cent (of GDP) and the investment rate exceeding the 36 per cent mark.
“This should facilitate the Indian economy to grow at 9 per cent in a sustained way,” he said, delivering the fifth G K Sundaram Endowment Lecture Series organised by the South India Cotton Association. “The broad economic parameters relating to savings and investment are conducive for growth,” he said and pointed out that even under the severe impact of global crisis, the Indian economy was able to protect itself reasonably well.
Despite the financial crisis, the economy grew at an average pace of 8.5 per cent between 2005-06 and 2009-10. “While growth is important, it is necessary to remember that it is not the only dimension for measuring performance or achievement. It is equally important to know who benefits from growth,” he added.
Conceding that growth has contributed to reducing the poverty ratio, Dr Rangarajan said the estimates still showed that the absolute poverty level continued to remain high. “We must therefore ensure that every section of the economy is included in the growth process. While a high growth rate will enable the government to raise the resources to meet the various socio-economic obligations, growth and equity must be weaved to provide a coherent pattern of development.”