Hyderabad: Expansion in demand needed to tide over current economic crisis says former RBI Governor Dr Rangarajan

Hyderabad: Former RBI Governor Dr C Rangarajan on Thursday said that the expansion in production and demand needed in the current crisis that the economy is experiencing.

Addressing a two-day conference organised by the ICFAI Business School, Hyderabad, he said that the current situation calls for the banking system, which has turned risk-averse, to give credit. He called the governments to invest more on healthcare, relief and education.

Dr Rangarajan predicted that the fiscal deficit could rise to 14 per cent, and steps towards pushing demand and production are necessary at this stage. 'Expansion in demand needed to tide over current crisis

The ICFAI Business School and the Indira Gandhi Institute of Development Research (IGIDR), Mumbai jointly organised the conference focussed on 'Economy, Finance, Well Being, and Methodology'.

In his inaugural address, Dr Rangarajan stressed that the research scholars should develop a deep understanding of the economic theory for conducting research. Scholars should be clear of what they want to do and the questions they wish to answer through their research.

In his special address, Prof S Mahendra Dev, Director and Vice-Chancellor, Indira Gandhi Institute of Development Research said that the financial sector has to play a role to tide over the current crisis. But the banks which are facing crisis could become risk-averse, he added.

Citing the statistics of over the last ten years, he said that though the poverty has reduced considerably, the fall in participation of women in the workforce, is a matter of concern.

"This need could be sufficed through innovative, out-of-the-box solutions provided the private sector and by scaling up of MSMEs," he added.

He said that several opportunities are coming our way due to the development of digital infrastructure and from global value chains that China is set to vacate.

Prof. J Mahender Reddy, Vice-Chancellor of the ICFAI Foundation for Higher Education, who presided over the inaugural session. The conference attracted papers from several leading institutes like IIMs, IITs, NITs, JNU, Delhi School of Economics, IGIDR, and IFMR among others.