‘India looking forward to quadruple per capita income to $6,500 in 20 years’

Chennai:

India is looking forward to quadruple its per capita income from the present $1,600 to $6,500 in the next 20 years and the country is not trying to race with China and its focus is to create jobsand improve living standards, according to a top finance ministry official.

Speaking at a panel discussion on “State of the Economy” organised by
the Southern India Chamber of Commerce and Industry (SICCI), Principal Economic Adviser in the Union Finance Ministry Dipak Dasgupta said that although the country had come out of the global economic slowdown in 2008, it faced numerous challenges in 2011 besides a creeping inflation.

However, he said the during December the inflation came into negative territory and there is a good suggestion that the country is heading towards lower inflation.

He said the country did well to overcome the global crisis but felt a shock in inflation as well as global commodity prices.

Sharad Sharma, chief general manager of State Bank of India, Chennai Circle, said the growth of agriculture, which composes 14.6 per cent of the country’s GDP, is predicted to grow at two to three per cent in 2012 and there is a need to push it to five per cent to attain double digit growth in GDP.

He also said India and Chinese economy are different. Indian economy is domestic driven while the Chinese is export oriented, the banker said.

He also said in southern part of India there is huge import of gold but this does not generate any economic output per se, he said. He also said dollarisation is a risk for Indian economy as this increases in foreign exchange liabilities of Indian corporates.

Sharma also said that on the issue of available liquidity the country does not have long term capital. He said the shift from BASEL II to BASEL III will require Indian banks to grow capital by 7 lakh crores. He said as per the 12^th plan, the country requires $721 billion for the infrastructure alone. The banker also highlighted the lack of social security for elderly citizens.

D K Srivastava, director of Madras School of Economics, said the country in its bid to overtaking China is lagging behind Bangladesh. Comparing the economy in 2007-08 to that of 2011-12, he said the rupee which was valued at Rs 40 per dollar in 2007-08 is now Rs 50 a dollarbesides the inflation which was at 4.3 per cent in 2007-08 is now 9.2 per cent in 2011-12. He predicted that pressure on interest rate will continue. He also stressed the need to invest more on education and health. Sampath Kumar, editor of Business Line also spoke on the occasion.