Reddy chants growth mantra

New Delhi, Nov 29 | Updated: Nov 30 2004, 05:54am hrs
High economic growth would be hindered in the medium term if institutional and infrastructural issues are not addressed, Reserve Bank of India governor YV Reddy has said in an article published in a Press Council of India souvenir. Dr Reddy has also said that the problem of unemployment has to be tackled to maintain a high growth.

Immediate prospects for growth with stability are good and are mainly a result of removing structural bottlenecks to growth especially in terms of deregulation and liberalisation, Dr Reddy said. However, he stressed that it was not enough to continue high growth in the medium term.

The article highlighted that for the medium term, attention was needed to sort out the institutional and infrastructural issues. While stressing better governance, he said, The tasks are essentially in the realm of functioning of government.

It may be noted RBI had recently pegged down growth projection to 6-6.5% for the current fiscal. This is lower than the projection of 7-8% made in the National Common Minimum Programme for the next five years.

Dr Reddy also pointed out that we have lagged behind in the social dimension of growth. He said that the current mood of confidence needed to be tempered with realisation of actions overdue in these areas, to sustain the momentum in medium term.

On rising umeployment, he said, Economy will have to face demographic challenge, which, if not adequately managed, could end up as a nightmare, with unemployment and social unrest.