Slowdown cyclical, FM's steps will improve economy: NITI Aayog Vice-Chairman

Emphasizing the need for 5 trillion dollar economy goal, Rajiv Kumar affirmed that keeping in mind the future need, we need to become a 5-trillion dollar economy and to do that we need a 12 per cent nominal GDP growth per annum.

Chennai: Delivering a lecture on "towards 5-trillion economy" at the Madras School of Economics, NITI Aayog Vice-Chairman Rajiv Kumar on Tuesday said that the current slowdown is cyclical. "Global GDP growth is slowing down and trade is becoming more protective and unreliable".

Emphasizing the need for 5 trillion dollar economy goal, Rajiv Kumar affirmed that keeping in mind the future need, we need to become a 5-trillion dollar economy and to do that we need a 12 per cent nominal GDP growth per annum. India needs to increase its share in global per capita income, he added.

Rajiv was confident of achieving the goal and said that the policy makers are working hard to reach the goal. Calling the state of agriculture in the country as 'crisis', the former principal economist of Asian Development Bank listed out the reforms need to be carried out in the sector including replacing MSPs with private traders and pulling labour out of agriculture sector.

Rajiv Kumar also suggested ZBF (Zero budget farming) reduce input cost and increase exports: "Surge in lending from 2004-2011 period is the reason for the current credit crunch in the economy and recent announcements by Finance Minister Nirmala Sitharaman such as Bank Merger and Bank recapitalization will improve the situation."

Speaking to ETV Bharat, former RBI Governor C. Rangarajan said that the slowdown is a decline in GDP Growth rate while the recession is a decline in GDP, a negative trend and clarified the current economic situation is a slowdown. Speaking at the event, he differed with Rajiv Kumar stating the current slowdown is caused by structural as well as cyclical factors.