Deficient rain not to hit growth: Rangarajan

Voicing concerns over the misery unleashed by scanty rainfall on the farm sector,newly appointed chairman of the Prime Minister’s Economic Advisory Council (PMEAC) C Rangarajan today said it could unleash great distress on the farming community. Rangarajan pointed out that tackling the drought-like situation is one of the key areas of concern for the EAC. “Though the impact of deficient rains on the overall growth may not be much,yet it could potentially trigger distress among the farming community,” he told The Indian Express. He argued that as a measure to contain rising prices of essential commodities,the government could resort to importing food items saying “we have large foreign exchange reserves,so it should not be a problem”.

Refusing to be drawn into the controversy whether the Below Poverty Line (BPL) population needed more urgent attention on ensuring food security,he said “both APL and BPL should be provided relief from rising food prices.” He argued that rise in food prices was more due to apprehensions of the trading community on lowered farm productivity in the current crop season.

Among other major concerns of the PMEAC are the inadequate growth of the power sector,which Rangarajan argued,was a key to propelling the Indian economy in the medium term. “Infrastructure is a major concern,if India has to clock a high growth trajectory,” he emphasised. Ruling out any further scope for softening of interest rates,Rangarajan,who has earlier served as RBI governor,made it clear that the main concern now is to prevent a hardening of interest rates.