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Jalan sees higher growth

Mumbai, Aug. 22 (PTI): Reserve Bank of India governor Bimal Jalan has hinted at an upward revision of the gross domestic product (GDP) and a likely downward movement of inflation in view of food prices coming down following a good monsoon.

“The monsoon has been better than expected; inflation has come down and the GDP could be revised upwards during the mid-term review of the credit policy in October to be carried by my successor Y. V. Reddy,” he said here today.

“The GDP, the monsoon and other factors will be taken into consideration during the mid-term review and changes, if any, will be accordingly decided,” he added.

Jalan said, “Inflation has been under control. There is no turbulence and we expect the soft interest regime to continue.” Though fiscal deficit was a problem with no magic formula to control it, Jalan said there was no risk on the soft interest regime in the immediate future.

Jalan was against setting any inflation target. He said: “There should be a range, but one should not set a target as other countries do since the Indian environment was different.”

Jalan, who is likely to lay down office in October after attending the World Bank meetings next month, said he would be settling down in Delhi and “maybe write a book about my tenure at the Reserve Bank”. He, however, declined to comment on his political future.

Jalan said there has been renewed confidence on the economy, especially during the last two to three years inspite of certain constraints. The country was able to come out of the crisis and showed resilience to external shocks, he added.

On corporates raising dollars abroad, Jalan said there was no cause for worry as “quantitative limits and administrative guidelines were in place”. Moreover, volumes were not that large to cause any worry, he added.

S&P rating

Standard and Poors' (S&P), the international rating agency, has affirmed its BB/B foreign currency and BB+/B local currency sovereign ratings for India with negative outlook, the government informed the Lok Sabha today.

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