Chidambaram pitches for high growth to compete with China
Amid debate over sacrificing growth to contain inflation, home minister P Chidambaram today said 9% economic expansion was necessary to raise per capita income and also to compete with neighbours like China.business Updated: Jul 15, 2011 19:35 IST
Amid debate over sacrificing growth to contain inflation, home minister P Chidambaram on Friday said 9% economic expansion was necessary to raise per capita income and also to compete with neighbours like China.
"There used to be some arguments that we should not aspire for 9% growth, may be we should settle for lower growth say 7%...if we grow at 5% or 6% that would be unfortunate", he said at a book release function here.
"...we (should) accept the fact that while many other objectives are laudable, robust faster growth should be among the highest objective of any government", he stressed.
Making a case for high economic growth, Chidambaram, former finance minister, said China overtook India in terms of per capita income in 1990 and the difference could widen significantly in the years ahead.
"China overtook India in 1990 (in terms of per capita income). In 2003, China's per capita was twice of India. In 2040, China's per capita will be 3.5 times of India. While India's will be USD 24,000, China's will be USD 85000", he added.
These numbers have "security implications", he said, adding India will have to live with a neighbour which can "outspend" the country three or four times on military, navy, air force and nuclear warheads.
The Reserve Bank, in a bid to contain inflation, has raised its key policy rates ten times since March 2010 and also lowered the growth projection to 8% for the current fiscal from 8.5% in 2010-11.
The initiatives of the Reserve Bank are having implications for the industrial growth which slipped to nine-month low of 5.6% in May.
RBI has taken a conscious call to sacrifice growth to check the rate of price hike which is nearing the double-digit mark. The headline inflation was 9.44% in June.