India becoming $5 trillion economy by 2025 ‘simply out of question’: Ex-RBI Governor C Rangarajan
New Delhi: Claiming that India will need another 22 years of sustained growth to become a “developed country,” former Reserve Bank of India (RBI) governor C Rangarajan said on Thursday that at the current growth rate, India becoming a USD 5 trillion economy by 2025 is “simply out of question.”
“The interesting thing is, even if you reach USD 5 trillion, the per capita income in India will grow from the current level of USD 1800 to USD 3600. Even then, India will be called low-middle income country,” said the economist who was awarded the Padma Vibhushan in the year 2002.
“In order to become a high middle income country, the per capita income has to USD 3800 which will take another few years… The definition of a developed country is one whose per capita income is USD 12000. It will take 22 years for India to grow at 9 percent per annum to reach there. The task before us is highly daunting. We need to get out of the current slowdown as quickly as possible,” he told the gathering at Ahmedabad Management Association (AMA).
Pointing out the Indian economy grew “far short of expectations” at 3.5 percent annually for the first 40 years after the country’s independence, Rangarajan said the annual average growth rate improved in the 1990s to 6.8 percent, especially after liberalisation in 1992-93. “The highest rate of growth that we have seen in India, is between 2005-06 and 2007-08, when the annual average rate of growth of the economy was 9.4 percent… In 2008-09, the growth rate fell down because of the international financial crisis. But in 2009-10 and 2010-11, once again the growth rate picked up and went beyond 8 percent,” he said.
Stating that the economy was currently experiencing “slowdown”, the veteran economist said the economic growth has slowed down from 8.2 percent in 2015-16 to 6.8 percent 2018-19.
“So the economy has declined even as per the new series of data… If you look at the quarterly data of 2017-18, the growth in fourth quarter was 8.1 percent, and as per the first quarter of 2019-20, the growth has come down to 5 percent. There is no doubt about the fact that the Indian economy has slowed down and it is a matter of concern,” Rangarajan said adding that economic growth during the current year will not be more than 6 percent.
Claiming that the government could increase its expenditure as one of the measures to prop up the economy, he said the scope of government implementing is limited as “many of the revenue projections made in the Union budget may go wrong.” He said Goods and Services Tax was not providing “enough revenue” as projected earlier. Stating that both long term and short term measures are needed, he said disinvestment can help in providing funds to the government to a certain extent. Increasing FDI and exports can also help to tide over the crisis,” he added.
Courtesy: indianexpress.com
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Iran attacks oil tanker near Dubai; Trump warns of strikes on energy sites if Hormuz remains shut
Tel Aviv/Washington: Iran attacked and set ablaze a fully loaded crude oil tanker off Dubai on Monday after US President Donald Trump warned that Washington would target Iran’s energy infrastructure if the Strait of Hormuz is not reopened.
According to a Reuters report, the Kuwait-flagged tanker Al-Salmi is owned by Kuwait Petroleum Corporation and was capable of carrying around 2 million barrels of crude. . It was struck in what authorities later described as a drone attack. The company said the incident occurred early Tuesday, causing a fire and hull damage. No injuries were reported and the fire was brought under control, Dubai authorities said .
Oil prices rose briefly following the attack and added to volatility in global energy markets. In the United States, retail gasoline prices crossed $4 per gallon for the first time in more than three years, according to data from GasBuddy, as crude prices moved above $101 per barrel.
Israel said it carried out missile strikes on military infrastructure in Tehran and on sites linked to Iran-backed Hezbollah in Beirut. Explosions were reported in parts of Tehran, with Iran’s Tasnim news agency saying power outages occurred in the eastern Pirouzi district following the blasts.
The Israel Defense Forces said four soldiers were killed in southern Lebanon. In recent days, three peacekeepers serving with the United Nations Interim Force in Lebanon were also killed in separate incidents in the same area.
Iran’s military spokesperson said Tehran’s latest wave of missile and drone strikes targeted US military positions at five bases in the region and sites in Israel. Thousands of troops from the US Army’s 82nd Airborne Division have begun arriving in the Middle East, according to US officials, expanding Washington’s military options even as diplomatic efforts continue.
White House Press Secretary Karoline Leavitt told Reuters Trump wants an agreement with Iranian leaders before a revised April 6 deadline for reopening the Strait of Hormuz, adding that talks were progressing, while public statements from Tehran differed from private communications.
Iran’s Foreign Ministry spokesperson Esmaeil Baghaei said proposals received through intermediaries were “unrealistic” and maintained that Iran was focused on defending itself.
In a social media post, Trump said that if a deal is not reached soon and the strait is not reopened, the US would strike Iran’s electric generating plants, oil wells and Kharg Island. However, a report in The Wall Street Journal said Trump had told aides he may be willing to end the military campaign even if the strait remains largely closed and address reopening it later. The White House referred to earlier remarks by Secretary of State Marco Rubio that the strait would be opened “one way or another.”
The administration has also requested an additional $200 billion in funding for the conflict, a proposal that faces opposition in the US Congress.
