High inflation, CAD poses threat of stagnating growth: Experts
With high inflation and slowing GDP growth rate as well as widening current account deficit, India is facing potential threat of stagnating growth, experts have said.
New Delhi: With high inflation and slowing GDP growth rate as well as widening current account deficit, India is facing potential threat of stagnating growth, experts have said.
"Inflation is the real threat, its not a concern now that we are about to witness. And with the Euro crisis not coming under control .. India may be under real problem," Jagannadham Thunuguntlaa, head of research, SMC Global Securities said at a seminar here on Wednesday.
However, agriculture has lot of potential for growth and the government should remove its control from this sector and let the market forces decide about the prices of agricultural produces, said Mathew Joseph, professor FORE school of Management.
The role of agriculture sector remains critical to the Indian economy. India is a strong rural demand led economy which boosts its growth, the PHD chamber said in a report.
India's economic growth rate plunged to the lowest in nine year at 6.5 percent in 2011-12 and current account deficit (CAD) has touched a high of 4 percent of the GDP.
At the same time, inflation is also high because of rising prices of protein based items, vegetables, fruits, milk and its products. The inflation in May was 7.55 percent.