India becoming $5 trillion economy by 2025 'impossible' due to COVID-19 pandemic, says ex-RBI governor C Rangarajan
India indeed needs a faster rate of growth to make up for the loss of output in the previous two years from the trend rate and must lay the foundation for faster growth in this year itself, the economist said
India, which till recently was hailed as the world's fastest-growing major economy, has seen growth rate decline to a six-year low of 4.5 percent in the September quarter of 2019-20
India expected to overtake Germany, become fourth-largest economy by 2026, says report by UK-based economics consultancy
The report further said India is also set to reach a gross domestic product (GDP) of USD 5 trillion by 2026, 2 years later than the government's target.
Now, even if one talks about the $5-trillion target, at the current rate of slowed growth, the target is merely wishful thinking.
Reaching $5 trillion GDP target by 2025 at current growth rate 'simply out of question', says former RBI governor C Rangarajan
The Narendra Modi government soon after assuming office for the second term has set a target of taking the economy to $5 trillion over the next five years.
Rangarajan said there are questions about the deflator that has been used and also on data on company affairs.
C Rangarajan's remarks come amid the Rs 12,700 crore fraud detected recently at the Punjab National Bank (PNB) and the banking system's overall struggle to overcome mounting bad loans
PNB fraud: RBI had no clue on Rs 11,400 cr scam for seven long years; can a super regulator do the job?
The PNB fraud highlighted a larger systemic problem raising questions about the effectiveness of regulatory framework followed by Indian banking system, risk management practices and vulnerability of Indian banks to fraudulent transactions that extends across the border
As part of a three-tier structure,there would be at least 3-4 banks of the size of SBI, the country's largest lender.
"I think the way the speeches are sometimes interpreted, when you read the speeches it comes out the way the criticism appears," he said.
The proposed 1 per cent additional tax on inter-state sales is against the spirit of Goods and Services Tax (GST) and that should not be implemented, former RBI Governor C Rangarajan said.
One area where reforms are directionally in the right direction is petroleum. Dharmendra Pradhan is now moving towards freeing gas pricing.
Government on Wednesday said it will come out with a new natural gas pricing formula by 30 September keeping in mind the interest of investors and public.
Mayawati said the Rangarajan report findings were nothing but "making a joke of poor people."
The BJP-led new government may appoint an expert panel to recommend a less-complex formula for pricing of natural gas to resolve the imbroglio that has been holding up investments.
The government may not implement the delayed increase in price of natural gas with retrospective effect as it would be difficult to back charge higher bills from power and CNG consumers, an official said.
Retail inflation as measured by the consumer price index accelerated to a three-month high of 8.59 percent in April, pushed up by a sharp spike in food prices.