‘Being tough on gold imports won’t work’
an external management perspective because of the pressure it puts on current account or capital account depending on your account for it,” Subbarao said.
On growth and inflation, Bimal Jalan, Rangarajan’s successor and Reddy’s predecessor said, “There are periods when growth is more important and you take policy measures to boost it. There are periods when you have to control inflation because that is the dominant public issue. So, there will be periods when you take measures, however, harsh they are to control inflation.”
Reddy added household savings which was an achievement till recently is now the most critical challenge for a future. “The behaviour of household savings indicates that they do not have faith in financial markets except banks. It is a bad sign.”
Rangarajan said, “If what has happened in the three-year period of decline is reversed either because of a fiscal consolidation programme or because of the inflation coming down lower, it is possible to get back… if not the 9 per cent but the 8 per cent rate of growth.”
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