Soaring inflation is expected to come down to around 6% in India in the next three months, reckons the chairman of the Prime Minister?s Economic Advisory Council, C Rangarajan.
?Factors like good anticipated monsoon season, adequate procurement of food grains and recent measures taken by the Reserve Bank of India (RBI) are expected to check inflation. In the long run, there exists no trade-off between parameters like growth and inflation. In fact, low inflation rate is necessary to ensure high growth in the economy. Indian economy is expected to grow at 8-8.5% in the future,? he said.
The former RBI governor, addressing an international conference on ?Financing, Better Banking Regulations and Integration of SMEs? here on Saturday, said 5% inflation was not a possibility in the immediate future.
Rangarajan while urged the Indian banking sector to double the credit flows to the SME sector within a period of five years and advocated the dire need of a separate SME exchange in India. He also called for promotion of a corporate bond market in the country for the benefit of the SME sector.
Venture capital of a meaningful size has emerged as an innovative source for financing the novel projects in India and banks should launch state-level venture capital funds for small scale units.
?It is the ripe time to review the support to the Indian SME sector as SME units are capable of making maximum contribution towards achieving the target of 9%-plus growth,? he said.
