Karaikudi (Tamil Nadu): The economy is passing through a "critical situation" of slow growth and high inflation, which has to be rectified, Prime Minister's Economic Advisor C Rangarajan said Monday.
"The country's economy is passing through a critical situation, the growth rate is slow, and inflation high. This has to be rectified," Rangarajan said, adding that the government is taking steps in this direction.
He stressed the need to control inflation and stabilise government's revenue.
Participating at the convocation of the Alagappa University here, he also stressed the need for increasing coal production, and a strong economic policy.
Stating that the economic crisis in 1991 had sown the seeds for new economic policy, he said, "The present economic growth is only due to the new economic policy, as it removed all the hurdles in the way of economic growth."
The ratio of contribution of government and private sector had been redrafted. Since 1992-93 the annual economic growth had been at 6.9 percent. Despite global crisis, economic growth touched 8.4 percent in 2009-10,he said.
Though the growth of agricultural sector was good in 2011-12, the production was disappointing as the investment in the farm sector was low, he said. Besides, production of coal and and minerals were also low.