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BW Businessworld

PM Meets Top Advisors To Discuss Current Economy

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Amid concerns over high inflation and dipping growth, Prime Minister Manmohan Singh on Sunday held informal confabulations with top economic advisors and officials to discuss the present economic situation.

The meeting was attended by Reserve Bank Governor D Subbarao, Planning Commission Deputy Chairman Montek Singh Ahluwalia and PMEAC Chairman C Rangarajan, besides some senior officials.

While there was no official word on what transpired at the meeting, sources said they informally deliberated on the current Indian and global economic scenarios.

The informal meeting comes days ahead of the second quarter monetary policy review of the Reserve Bank of India (RBI) on October 25. The central bank has already raised interest rates 12 times in the last 18 months to tame rising prices.

There are indications that RBI may continue with its current hard monetary stance in view of both headline and food inflation remaining close to the double-digit mark, much above the comfort level for the central bank.

"The meeting (with PM) is on the current economic situation. We will have a discussion on growth and inflation, and consider the policy options in this regard," Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan had said yesterday.

Headline inflation stood at at 9.72 per cent in September as food products, fuel and manufactured goods grew costlier, a development that is likely to prompt RBI to continue with its policy of monetary tightening.

Indian economy grew by 7.7 per cent in the first quarter, the slowest growth in 18 months, against 8.8 per cent in the same period of the previous fiscal.

Industrial output also remained subdued for the second consecutive month in August, registering a growth of just 4.1 per cent.

(PTI)