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E-mail ID will not be published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

  • By standing up for its priorities at WTO, India has saved its farmers

    Narendra Modi has demonstrated his global priorities during his short stint in power by engaging Pakistan and China on the need to mend fences with In

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

Dealing with a sin called insensitivity

Rage and the notion of being above the law — ...

Purnendu Ghosh

Avoiding utopian or dystopian extremes

One must know the known in order to know the ...

Shona Adhikari

The tormented founding father of modern art

The subject for today’s art column has been triggered by ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture