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Rangarajan moots 3-step strategy to improve investment rate

The government has identified a three-pronged strategy to increase investment in the economy, said Dr C Rangarajan, chairman of the Prime Ministers Economic Advisory Council.


The slowdown in investment and savings rate in India is a concern, said Dr C Rangarajan, chairman of the Prime Minister’s Economic Advisory Council.

Proposing a three-step strategy to improve investment in the economy, he said completing the government’s investment programme; reviving private investor sentiment; and removing hurdles, such as the Land Acquisition Bill and environmental clearance, in private sector investment could tackle the fall in investment rates. 

Speaking at the 30th Skoch summit in Delhi today, Dr Rangarajan said decisive action was needed to achieve production and capacity building in coal and other areas, adding that  public sector investment currently accounts for  8.2-8.3 per cent of the gross domestic product (GDP ).

Dr Rangarajan said domestic savings rate has fallen to 10 per cent from 11 per cent, and could dip further in the current fiscal year. A tame inflation rate could increase savings, he said, reiterating the need for a stable tax structure.

On current account deficit, he said the figure will be 3.5 per cent this fiscal year, but a decline in gold and coal imports could lead to a fall in the numbers. Financing the current account deficit is important, he added.

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