Economy may recover in Q2 of 2009 - Mr Rangarajan
Economist and former Reserve Bank Governor C Rangarajan said that the economy will recover in the second half of 2009 and there would be distinct improvement in growth in 2010 - 11.
Mr Rangarajan while speaking at the 43rd convocation of the Indian Institute of Foreign Trade said that Gross domestic product growth in 2008 - 09 would be below 7% down from 9% recorded in the previous fiscal.
According to the Central Statistical Organisation's advance estimates of GDP in February, the economy is estimated to grow by 7.1% during 2008-09.
Mr Rangarajan said that "As regards India... we will see signs of recovery in the second half of 2009. Fiscal 2010 - 11 will see improvement in growth."
He said that the global financial meltdown and the drying up of liquidity have made it tougher for Indian companies to borrow funds from overseas markets, in addition to putting pressure on the domestic banking system.
Noting that the initiatives by the RBI to ease liquidity have not percolated to the ground level, he said that it is necessary for the central bank to watch the liquidity situation and take steps from time to time.
The RBI is slated to announce its annual credit policy on April 21, which will take stock of the current liquidity situation and initiate steps to address the concerns of industry.
(Source : Financial Express)
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