President confident economy will grow over 7 pc in FY'11
President Pratibha Patil today exuded optimism that the Indian economy would record over 7 per cent growth next fiscal, but cautioned the Reserve bank against unbridled credit growth that can fuel inflation.delhi Updated: Jan 16, 2010 14:05 IST
President Pratibha Patil today exuded optimism that the Indian economy would record over 7 per cent growth next fiscal, but cautioned the Reserve bank against unbridled credit growth that can fuel inflation.
Releasing a commemorative stamp on the occasion of the Platinum Jubilee of the RBI, the President also asked the apex
bank to consider evolving a mechanism to give loans to women Self-Help Groups, particularly those comprising people below the poverty line, at interest rates not exceeding four per cent per annum.
Patil, however, cautioned the RBI to avoid indiscriminate grant of credit, while ensuring that credit to productive
sectors is not denied.
Excess money supply through cheap loans has the potential to drive inflation higher. Wholesale prices-based inflation is already over 7 per cent, according to December data.
"If there is one lesson that can be drawn from this crisis is that there cannot be unbridled extension of credit.
The Reserve Bank must continuously ensure that banks have proper guidelines for risk management," Patil said.
"Though we did see a fall in our growth rate initially we have now risen close to 7 per cent growth rate, justifying the correctness of our policy stance. Our growth trajectory is expected to be higher in the coming year," she said.
Finance Minister Pranab Mukherjee had earlier this month projected that economic growth would touch 7.75 per cent this fiscal.