'India can sustain growth rate'

Special Correspondent

Finance Secretary says that globalisation is here to stay



D. Subba Rao

HYDERABAD: Union Finance Secretary D. Subba Rao has said that the Indian economy had the potential to sustain the current rate of growth, as the growing consumption demand is fuelling investment demand.

Delivering the C.C. Desai memorial lecture on 'Elephants too dance: The India growth story' at Administrative Staff College of India (ASCI) here on Saturday, Dr. Rao listed out five challenges and said addressing them could maintain the country's growth momentum.
Five challenges

Stepping up agricultural growth to a sustained four per cent; expanding employment opportunities; improving service delivery; bridging the infrastructure deficit and efficient management of globalisation were keys to unlock the potential, he said.

Globalisation as an economic force was here to stay, he said. India was a truly globalised economy, as the two-way trade was now pegged at 35 per cent of the gross domestic product (GDP) and if the two-way movement of capital flow was added, it would be almost 100 per cent of the GDP.

Dr. Rao said there was excess capital flow into the country. While the current account deficit was 1.8 per cent of the GDP, the capital inflow was estimated at four to five per cent. This was mounting pressure on the rupee, affecting exports. He felt that the current account deficit could go up to three per cent.

For improving service delivery, he underscored the need for spending more on education and healthcare and making quality in education more important than quantity to produce more employable people. The growing dependence on public-private partnership was only to double the capital expenditure on infrastructure development. "But we have brick and mortar syndrome like school buildings without teachers and health centres without doctors. We need to come out of this," he observed.

ASCI chairman M. Narasimham and principal S.K. Rao and several bureaucrats participated.