Inflation has remained well under control during the Modi government’s tenure, providing relief to the middle class and the poor, said Chief Economic Advisor Krishnamurthy Subramanian. Low prices, strong monetary policy framework by the RBI and economic reforms have boosted the domestic consumption in the economy, the noted economist also said in the keynote address at a CII Conclave in Chennai on Friday.
The commodities would have been 30-35 per cent costlier as against current prices if 10 per cent inflation rate, before this government, would have prevailed, he noted. RBI’s monetary policy framework has been a key contributor to the lowering of inflation, he also said.
Also read: CEA Subramanian counters Raghuram Rajan on GDP data: Controversy baseless; growth best since liberalisation
Right time has arrived to take disruptive ideas of all kinds in the right sense, as all of them were aimed at the overall development of the country, he said, adding GST and IBC are two key transformational reforms under the incumbent government.
Global challenges such as muted exports and slow credit growth posed a challenge for some time, he said. Against this, the country recorded 7.5 per cent average growth over the last five years. It happened despite credit growth is very slow, almost grinding to a halt.
Is now India more immune to some of the shocks that may have been experienced across the world on account of resilient growth in domestic consumption.
In the same speech, the veteran economist also responded to the doubts raised by former RBI Governor Raghuram Rajan saying that the ongoing controversy over growth data is baseless. The narrative which is being created over GDP data is different from the truth, he added. The average rate of growth posted during the tenure of the Modi government is the highest for any government since liberalization, he noted.