Food subsidy is of paramount importance: Rangarajan

Tags: News
Full subsidy to food is of `paramount' importance for countries like India, Chairman of Prime Minister's Economic Advisory Council C Rangarajan today said.

"The target of the government as a part of fiscal consolidation exercise is to bring down subsidies as a percentage of GDP. But providing complete food subsidy is of paramount importance for countries like India," he said here.

For this purpose, other subsidies would have to be pruned like those on petroleum products and diesel which the government had done recently, he said speaking at an interactive session at the MCC Chamber of Commerce and Industry.

Rangarajan said the government had laid down the road map for fiscal consolidation as both higher fiscal deficit and current account deficit (CAD) deters capital flows.

The former RBI governor said taming inflation by the right balance of monetary and fiscal policies was also important at the moment and the government was tackling the issue with extreme seriousness.

Rangarajan said rating agencies should take note of the various measures being taken by the government.

According to him, growth rate had slowed down but not to the extent which other countries had experienced.

"A nation which has a stable taxation regime and reforms process is on the move," he said.

Going by economic trends, Rangarajan said growth would be between 5.5 per cent to six per cent in the current fiscal and CAD would be between 3.5 per cent to 3.6 per cent of GDP .

The trends also point out that capital flows would be adequate to finance CAD and rupee would not depreciate further and stay at current levels, he added.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • India’s festivals teach us to share our wealth and joy

    India is an aporia in its own true sense.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Tushar Gandhi

Sustainable model for rural sanitation

Prime minister Narendra Modi has promised to build a toilet ...

Zehra Naqvi

How smells evoke strong memories

Remember that time when a passing fragrance transported you to ...

Dharmendra Khandal

Indian zoos need a fresh approach

Recently, when a man jumped in a tiger trench of ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture