labels: economy - general
Montek, Rangarajan say economy overheatingnews
21 March 2007

New Delhi: C Rangarajan, chairman of the Economic Advisory Council to the Prime Minister, and Planning Commission Deputy Chairman Montek Singh Ahluwalia say they see signs of the economy overheating.

Ahluwalia said, "There are signs of overheating in the economy and the 9 per cent economic growth is putting pressure on inflation." He also said that the upswing in the economy was unlikely to continue in the long run.

Rangarajan, the former governor of the Reserve Bank, said at a book release function here that overheating was cyclical in nature, but it must be ensured that overheating must not become structural. He said overheating would become structured if certain sectors of economy like infrastructure do not develop as fast as the economy.

Rangarajan further said that the current price rise was unacceptable and the monetary demand side and supply side problems must be addressed.

Ahluwalia said inflation had been brought under control as the government has taken several fiscal and monetary measures.


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Montek, Rangarajan say economy overheating