Aiming for a double-digit growth rate between 2012-13 and 2016-17, Prime Minister Manmohan Singh expressed concern on the rising prices and asked the Reserve Bank of India (RBI) to formulate policies that control inflation and pave way for a nine per cent ‘inclusive’ growth rate by the financial year 2011-12.
On a day when the food inflation rose from 16.22 to 16.35, the prime minister, speaking at the platinum jubilee celebrations of RBI, said that the monetary and financial policies must look to bring down the prices.
“They (the policies) must ensure that inflation is kept under control since it hurts the common man the most and also distorts economic signals.”
The prime minister also said that the policies should ensure stability of the banking and financial system and should meet the financial intermediation needs of rapid and inclusive growth.
He enthused confidence on a better growth rate for the country on account of high domestic savings rate of 35 per cent and a domestic investment rate of 37 per cent.
“I believe we can get back to 9 per cent by the end of the Eleventh Plan (2007-2012) and do even better thereafter,” he said. “I have therefore asked the Planning Commission to explore the feasibility of achieving 10 per cent inclusive growth in the Twelfth Five Year Plan.”
Finance Minister Pranab Mukherjee talked about addressing gaps in the financial sector regulation for which he has announced setting up of financial stability and development council (FDSC).
“FSDC will be doing only what is not currently been done in the existing set up,” said Mukherjee.
Mukherjee also touched upon the need for reforms in financial sector legislation.
“Most legislations governing the financial sector are very old. The Financial Sector Legislative Reforms Commission could rewrite and clean up the financial sector laws to bring them in time with current requirements,” said Mukherjee.