‘Indian economy in good shape as the country’s GDP growth rate are high’: Says Ex-RBI Governor

 

Mumbai: Former RBI Governor Bimal Jalan said on Thursday that the Indian economy is in good shape as the country’s GDP growth rate and foreign exchange reserve are high. Jalan said that the economic uncertainties triggered by the Russia-Ukraine war that is also impacting the global supply chain is not going to affect India’s economic performance.

‘India’s current macroeconomic situation is quite positive in the sense that the rate of growth is high. India’s foreign exchange reserve is also very high. ndia (Indian economy) is in good shape’, Jalan told PTI in an interview. Asia’s third-largest economy is projected to grow 8.9% in 2021-22, according to recent government data. The Reserve Bank of India (RBI) has pegged the economic growth rate for 2022-23 at 7.8%. While observing that development in Ukraine is a matter of concern, Jalan said it is not going to affect India’s economic performance.

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The former RBI governor, however, stressed that unemployment is high, which is a matter of concern. As the Russia-Ukraine crisis is concerned, Jalan said obviously, it will have an impact all over the world. ‘But so far India is concerned, its relationship with Russia was quite good but exports-imports was not very much’, he said, adding that it was less than 2%.

Jalan noted that high inflation is another problem. Retail inflation hit an eight-month high of 6.07% in February, remaining above the RBI’s comfort level for the second month in a row, while wholesale price-based inflation soared to 13.11% on account of the hardening of crude oil and non-food item prices. Regarding high petrol and diesel prices, Jalan said the government has already cut some taxes on petrol and diesel. ‘And some more taxes if they can reduce, (then) that is desirable’, he said.

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When enquired whether should India use its foreign reserves for infrastructure as proposed by Union minister Nitin Gadkari, he said as far as infrastructure development is concerned, it has to be done in rupees. ‘Foreign exchange reserves have to be used for doing something in foreign exchange…if there is a shortage of money, then foreign exchange reserves can also be liquified’, the former RBI governor suggested.