'Growth from 2003004 should not be overlooked'
Chennai:
India should be growing at 7.5 per cent but delay in infrastructure
projects and unavailability of critical inputs like power and coal and
other issues has brought down the growth rate to less than five per
cent, according to former chairman of Economic Advisory Council to
Prime Minister C Rangarajan.
Addressing a conference on “Business Excellence and Internal audit”,
Rangarajan said the growth of Indian economy from 2003-04 should not
be overlooked.
“In 2007-08 the Indian economy was growing at 9.4 per cent and this
was due to the investment rate which was 38 per cent,” he said.
Although the investment rate fell to 30 per cent, India still could
have maintained a growth rate of 7.5 per cent. But then this could not
be maintained and the growth rate slipped to below five per cent.
While the incremental capital output ratio was 4:1 in 2008-09 and was
the same in 2012-13. The output flow due to project delays, deficiency
in supply of power did not commemorate the investment rate restricting
the growth rate.
The government should address these problems, including the
environmental concerns and land acquisition issues to increase the
growth rate, he said.
He advised the government to speed up completion of projects and
overcome the bottlenecks so that there is minimum intervention to
higher growth rate.
“If India grows at 8 to 9 per cent per annum, it is estimated that the
per capita GDP will increase from the current level of $1,600 to
$8,000 to $10,000 by 2025. Only then will India transit from being a
low income to middle income country,” Rangarajan said.
Hal Garyn, vice-president of professional practices, Institute of
Internal Auditors Global, highlighted the change in the corporate
world after the global economic crisis. “Now companies are having a
risk committee as well as a audit committee in board,” he said.
He said risk committee makes the board effective and creates
opportunity for rich dialogue. “Risk is not bad but it has to be
managed effectively,” he said
Chennai:
India should be growing at 7.5 per cent but delay in infrastructure
projects and unavailability of critical inputs like power and coal and
other issues has brought down the growth rate to less than five per
cent, according to former chairman of Economic Advisory Council to
Prime Minister C Rangarajan.
Addressing a conference on “Business Excellence and Internal audit”,
Rangarajan said the growth of Indian economy from 2003-04 should not
be overlooked.
“In 2007-08 the Indian economy was growing at 9.4 per cent and this
was due to the investment rate which was 38 per cent,” he said.
Although the investment rate fell to 30 per cent, India still could
have maintained a growth rate of 7.5 per cent. But then this could not
be maintained and the growth rate slipped to below five per cent.
While the incremental capital output ratio was 4:1 in 2008-09 and was
the same in 2012-13. The output flow due to project delays, deficiency
in supply of power did not commemorate the investment rate restricting
the growth rate.
The government should address these problems, including the
environmental concerns and land acquisition issues to increase the
growth rate, he said.
He advised the government to speed up completion of projects and
overcome the bottlenecks so that there is minimum intervention to
higher growth rate.
“If India grows at 8 to 9 per cent per annum, it is estimated that the
per capita GDP will increase from the current level of $1,600 to
$8,000 to $10,000 by 2025. Only then will India transit from being a
low income to middle income country,” Rangarajan said.
Hal Garyn, vice-president of professional practices, Institute of
Internal Auditors Global, highlighted the change in the corporate
world after the global economic crisis. “Now companies are having a
risk committee as well as a audit committee in board,” he said.
He said risk committee makes the board effective and creates
opportunity for rich dialogue. “Risk is not bad but it has to be
managed effectively,” he said
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