Good Monsoon tweaks Indian economy

The Indian economy is poised for a high growth rate this fiscal due to good monsoon rains and a strong industrial revival, among other factors.

    It rained aplenty in India this year

    The country’s central bank head Bimal Jalan on Saturday said during the last financial year ending 31 March 2003, the economy had done well despite a withering drought, compounded by external factors including a global slowdown and the invasion of Iraq.

      

    Last year's drought in 14 states suppressed demand, pulling down industrial growth as well as overall economic growth, according to the 62-year-old Governor of the Reserve Bank of India (RBI).

     

    Resilient

      

    Despite this, management of the economy had been good last year, Jalan told the NDTV news channel, adding, "Our resilience to handle problems has improved.

      

    "Things are much more stable... much better after a crisis," he said.

      

    "We are dependent on rains. One wishes we were less dependent on the rains," he added.

      

    He did not give a specific growth rate, but said India's economic position was strong enough to see growth rates of 6.0 or 6.5% in the medium term.

     

    "We are dependent on rains. One wishes we were less dependent on the rains"

    Bimal Jalan,

    RBI Governor

    But Jalan warned that a high fiscal deficit was impeding economic growth. "Fiscal deficit is a problem from the growth point of view. We are using a lot of domestic savings for current consumption and that is not desirable," he said.

      

    With marginal improvement in total receipts and containment of expenditure, the federal government's fiscal deficit stood at 386 billion rupees ($8 billion) in the first quarter of this year.

      

    A government report last week said the fiscal deficit was equivalent to 25% of budget estimates as against the corresponding figure of 29% the previous year.

      

    Jalan described India's foreign exchange reserves of about 85 billion dollars as "comfortable." 

      

    SOURCE: Agencies


    YOU MIGHT ALSO LIKE

    'We scoured for days without sleeping, just clothes on our backs'

    'We scoured for days without sleeping, just clothes on our backs'

    The Philippines’ Typhoon Haiyan was the strongest storm ever to make landfall. Five years on, we revisit this story.

    How Moscow lost Riyadh in 1938

    How Moscow lost Riyadh in 1938

    Russian-Saudi relations could be very different today, if Stalin hadn't killed the Soviet ambassador to Saudi Arabia.

    Unification: Saladin and the Fall of Jerusalem

    Unification: Saladin and the Fall of Jerusalem

    We explore how Salah Ed-Din unified the Muslim states and recaptured the holy city of Jerusalem from the crusaders.