New Delhi:
Expressing concern over rising prices, Prime Minister Manmohan Singh on Thursday asked the Reserve Bank of India to formulate policies that control inflation and pave the way for nine per cent-or-more economic growth.
Addressing the Platinum Jubilee celebrations of the central bank, he said the monetary and financial policies must ensure that "inflation is kept under control as it hurts the common man the most and also distorts economic signals."
Singh, who himself was RBI Governor in the 1980s, said that the policies should also bring about stability of the banking and financial sectors to avert any financial crisis, besides meeting the financial intermediation of rapid and inclusive growth.
The Prime Minister's advice comes about a fortnight before RBI's annual monetary policy, where a major challenge would be to tackle inflation that is nearing double-digits.
Contrary to a period of slower growth witnessed by industrialised countries, India has emerged stronger with a good prospect of better performance on account of high savings and investment rate, he said.
"We must build on these strengths and return as quickly as possible to a high growth path. 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, adding that the Planning Commission has been directed to explore 10 per cent growth in the next five year plan.
Reforms impossible without RBI
The Prime Minister regarded as the architect of India's economic reforms, said liberalisation would have not been the success it is today without the Reserve Bank's enthusiastic support.
Singh said that when he took over as Finance Minister in 1991 he was convinced that the economic liberalisation could only succeed if complemented by broad-based reform in the banking and financial sectors.
"I turned to my old friend and former RBI Governor M Narasimham to chair a committee to make recommendations on this issue... It would have been difficult to implement those reforms had they not received enthusiastic support, as they did, from the Governor of the day S Venkitaramanan," Singh said, paying credit for the role RBI played in helping shape India's economic future.
Singh, who served as RBI Governor from 1982-85, was speaking at the Platinum Jubilee celebrations of the apex bank.
It was during Venkitaramanan's tenure that the country faced difficulties related to the external sector, including the balance of payments crisis. His term also saw India adopt the IMF's stabilisation programme where the Rupee underwent a devaluation and the subsequent launch of the programme of economic reforms.
Singh said C Rangarajan, who succeeded Venkitaramanan, took the financial reform agenda further forward in many critical areas.
The Prime Minister said that he recalled "with deep appreciation the role played by the Reserve Bank in helping the government in the implementation of the agenda for
economic reforms when I was Finance Minister."
"We were often criticised for our incremental approach which critics often complained was too slow. But few would deny that we have accomplished a great deal over the years.
"We have successfully eliminated stifling controls on industry and investment. We have opened the economy to foreign trade, lowered tariffs and switched over to a market determined exchange rate," he said, pointing out that all of this has been achieved without experiencing serious macro-economic crisis or severe inflation.
Addressing the Platinum Jubilee celebrations of the central bank, he said the monetary and financial policies must ensure that "inflation is kept under control as it hurts the common man the most and also distorts economic signals."
Singh, who himself was RBI Governor in the 1980s, said that the policies should also bring about stability of the banking and financial sectors to avert any financial crisis, besides meeting the financial intermediation of rapid and inclusive growth.
The Prime Minister's advice comes about a fortnight before RBI's annual monetary policy, where a major challenge would be to tackle inflation that is nearing double-digits.
Contrary to a period of slower growth witnessed by industrialised countries, India has emerged stronger with a good prospect of better performance on account of high savings and investment rate, he said.
"We must build on these strengths and return as quickly as possible to a high growth path. 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, adding that the Planning Commission has been directed to explore 10 per cent growth in the next five year plan.
Reforms impossible without RBI
The Prime Minister regarded as the architect of India's economic reforms, said liberalisation would have not been the success it is today without the Reserve Bank's enthusiastic support.
Singh said that when he took over as Finance Minister in 1991 he was convinced that the economic liberalisation could only succeed if complemented by broad-based reform in the banking and financial sectors.
"I turned to my old friend and former RBI Governor M Narasimham to chair a committee to make recommendations on this issue... It would have been difficult to implement those reforms had they not received enthusiastic support, as they did, from the Governor of the day S Venkitaramanan," Singh said, paying credit for the role RBI played in helping shape India's economic future.
Singh, who served as RBI Governor from 1982-85, was speaking at the Platinum Jubilee celebrations of the apex bank.
It was during Venkitaramanan's tenure that the country faced difficulties related to the external sector, including the balance of payments crisis. His term also saw India adopt the IMF's stabilisation programme where the Rupee underwent a devaluation and the subsequent launch of the programme of economic reforms.
Singh said C Rangarajan, who succeeded Venkitaramanan, took the financial reform agenda further forward in many critical areas.
The Prime Minister said that he recalled "with deep appreciation the role played by the Reserve Bank in helping the government in the implementation of the agenda for
economic reforms when I was Finance Minister."
"We were often criticised for our incremental approach which critics often complained was too slow. But few would deny that we have accomplished a great deal over the years.
"We have successfully eliminated stifling controls on industry and investment. We have opened the economy to foreign trade, lowered tariffs and switched over to a market determined exchange rate," he said, pointing out that all of this has been achieved without experiencing serious macro-economic crisis or severe inflation.
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