“If the economy can grow up to 8-9% for a decade or so, the number of people below the poverty line will come down. Since the vulnerable and poor do need to be given special treatment, we need two-fold approaches: letting the economy grow fast and directly addressing the problems of the poor,” said C. Rangarajan, former chairman, Prime Minister’s Economic Advisory Council and former Governor, Reserve Bank of India, while giving a talk at Loyola college here in Chennai on Friday.
Speaking at the International Conference on Finance and Economics organised by Loyola Institute of Business Administration on the topic ‘Current Trends in Finance and Economics’, he said, “The rural employment guarantee scheme, extension of food security were all done when the economy was strong. A policy intervention is needed to divert the surpluses that are generated to development. Growth cannot be sustained for a long time unless the population is healthy and educated. For sustained development, you need an educated population.”
Mr. Rangarajan indicated that government intervention must be of high quality. He said that the challenge is to maintain a tolerable level of inflation. “Is there a trade off between price stability, inflation and growth? This is the most common question asked. Over an extended period, growth itself requires price stability. Price stability at a level should not come in the way of growth,” he said.