Inflation completely under control in India, says CEA Arvind Subramanian

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New Delhi | November 18, 2015 5:41 PM

Chief Economic Advisor Arvind Subramanian also said that India needs to boost its growth with public spending and as well as private investment.

Arvind SubramanianChief Economic Advisor Arvind Subramanian also said that India needs to boost its growth with public spending and as well as private investment. (Photo: PTI)

Inflation is completely under control and it is well within the target of the Reserve Bank, Chief Economic Adviser Arvind Subramanian said on Wednesday.

“Inflation is completely under control. Our inflation has come down. We are not at the levels of the US and China. We are within the RBI target but we are not at 2 or 1 per cent or so,” Subramanian told reporters during an investment management round-table.

Retail inflation stood at 5 per cent in October, which was the third straight month the consumer price index-based inflation rose due to costlier pulses and other food items. Retail inflation was at 4.41 per cent in September.

The Reserve Bank has targeted an inflation level of 5.8 per cent by January 2016, lower from its earlier projection of 6 per cent.

As per BNY Mellon Investment Management Asia Pacific, the G4 nations– Japan, the US, China and India — after a period of economic disrepair and political drift, are now in the mid of recovery, reform or both.

“We call them the G4, as befits the world’s four biggest economies, valued at purchasing power parity. This optimistic G4 scenario envisages growth over the rest of this decade averaging 2 per cent in Japan, 3 per cent in America, 7 per cent in China and 8 per cent in India,” said Simon Cox, Managing Director & Investment Strategist, BNY Mellon Asia Pacific.

Subramanian also added that India needs to boost its growth with public spending and as well as private investment.

“In budget we said that private investment is going to be weak because of the legacy issues. And therefore we need to kick start growth.

“Not just by boosting government consumption, but actually by increasing public investment because that will crowd in private investment. And also, it is related to the Make in India supply side,” he said.

Further, Cox also said that all these economies have room to recover.

“If demand revives, they can grow quickly for a spell before running into capacity constraints,” he added.

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