The Indian economy, projected to grow 6.7% in 2012-13, may return to 8% growth in two years, with inflation likely to fall further, said C Rangarajan, chairman, Prime Minister’s Economic Advisory Council.
“The growth rate in the current fiscal year (2012-13) will be a shade better than previous fiscal year,” said Rangarajan on the sidelines of banking conference oganised by the Federation of Indian Chambers of Commerce and Industry and Indian Banks' Association. “Perhaps in another two years time we should get back to 8% rate of growth.”
He also said that the RBI needs to bring down the cash reserve ratio (CRR) and control credit flow through open market operations. The CRR is the proportion of deposits banks must set aside with the central bank.