Diplomacy will play a key role in India’s economic growth: C Rangarajan

Ishari Okay Ganesh, Chairman, Vels Group of Establishments with C. Rangarajan, Former RBI Governor and Former Chairman, Prime Minister’s Financial Advisory Council and S. Mahendra Dev, Chairman, Prime Minister’s Financial Advisory Council, on the 108th Annual Convention of The Indian Financial Affiliation on Indian Economic system -Navigating Home Realities and International Shifts, in Chennai on Saturday
| Picture Credit score:
Bijoy Ghosh

India might want to handle key diplomatic challenges like america’ 50 per cent tariffs in cut back its financial vulnerability in line with Chakravarthi Rangarajan, former governor of the Reserve Financial institution of India and chairman of the Prime Minister’s Financial Advisory Council.  

Rangarajan was talking on the 108th Annual Convention of the Indian Financial Affiliation at Vels College in Chennai. 

“Until we handle the issue of diplomacy and convey a couple of answer, we’re going to be in a troublesome scenario. We can not afford to be closely depending on our provide of exports to the US. We might want to push our financial expertise with the intention to convey a couple of large change when it comes to diplomacy,” he mentioned. 

By way of the autumn within the rupee Rangarajan attributed the autumn to the capital outflows that has occurred in the previous few months pushed by a insecurity by worldwide buyers because of tense India US relations. “The autumn within the worth of the Indian rupee cannot be ignored because it has an impact on the emotions of the people who find themselves investing,” he mentioned.

With respect to the GDP progress he mentioned that current progress figures should be considered within the context of the pandemic.

“Whereas we averaged 6.1 per cent progress between 2012–13 and 2023–24, we nonetheless want round 1.3 per cent extra to get to the place we need to be. The current growth of about 7.3 per cent is partly to offset the losses that we had in the course of the Covid interval,” he mentioned 

He added that India might want to again up its present progress by 1-2 per cent per yr to realize its growth targets by 2047.

Rangarajan believes that such exponential progress will rely on a mix of a large number of things, together with elevated funding by the non-public sector by not less than 2 per cent Whereas greater public capital expenditure has pushed current features, this can not proceed indefinitely and there’s a want for a revival in non-public funding past interest-rate cuts, he mentioned. 

Know-how adoption, together with leading edge applied sciences like AI, he added, is unavoidable for competitiveness. “Not like earlier industrial improvements, AI impacts all sectors concurrently and whereas it might disrupt many roles, it may additionally present substantial productiveness features if deployed successfully,” he mentioned. 

Printed on December 27, 2025