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

    Interactive: Coding like a girl

    Interactive: Coding like a girl

    What obstacles do young women in technology have to overcome to achieve their dreams? Play this retro game to find out.

    Heron Gate mass eviction: 'We never expected this in Canada'

    Hundreds face mass eviction in Canada's capital

    About 150 homes in one of Ottawa's most diverse and affordable communities are expected to be torn down in coming months

    I remember the day … I designed the Nigerian flag

    I remember the day … I designed the Nigerian flag

    In 1959, a year before Nigeria's independence, a 23-year-old student helped colour the country's identity.