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'High fiscal deficit, low investment may impede growth'

The Reserve Bank of India Deputy Governor Rakesh Mohan said on Monday that the continuing high fiscal deficit, interest payment on government borrowings, low investment and comparatively high interest rate may pose hurdles for the economic growth in the next year.

While delivering a lecture on `Global economy 2003: Recovery or Recession?' jointly organised by HDFC and London Business School, Rakesh Mohan said the high fiscal deficit is persisting for the last 20 years and was not dwindling the way the global economic reforms demands.

He said that the country needs a high productivity rate, which requires huge investment. He wondered how it would be possible to move ahead with a huge fiscal deficit.

Rakesh Mohan said that the profit growth of the companies was higher than the sales growth over the year. He said the sales will also grow only if the productivity rate grows.

UNI

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