India can achieve 8% GDP growth: Jalan

By siliconindia   |   Friday, 27 December 2002, 08:00 Hrs
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NEW DELHI: Reserve Bank of India Governor Bimal Jalan said Friday that there exists a right macro-economic condition to achieve the targeted eight per cent Gross Domestic Product (GDP) growth during the Tenth Plan period (2003-2007).

"Frankly and without equivocation, I believe the overall macro-economic situation has seldom been better. Whether we are able to use this opportunity to meet the targets set out in the Tenth Plan is the challenge," he said while inaugurating the 24th Bank Economists' Conference here.

Contrasting the health of the economy with the mood in relation to the future, the RBI Governor said ''a sense of gloom prevails and there is a measure of cynicism about whether the targets can be met.''

Dr Jalan's explanation for the dichotomy in perception had more to do with systemic ills and social values rather than the economy itself. Identifying low productivity as the core problem, he said there was inefficiency in the use of resources. "There is tolerance of sloth and waste. Our savings may be the highest in the world, but for every Rupee of capital expenditure we get much less by way of output," he added.

Stating that the country possessed brilliant individuals and a weak public system, he said the progress that had been achieved so far was a ''credit to Indian ethos, not the system.'' ''The country has a lot of garbage on the streets, but had perhaps the cleanest homes in the world. This is the dichotomy that we have to tackle,'' Dr Jalan added.

Regarding fears that increased productivity would result in unemployment, he said there was no tension between the two and higher output would only result in greater job opportunities.

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