NEW DELHI, August 18: The economy can be catapulted to a 7 per cent trajectory if the fiscal deficit is limited to 4 per cent. This can be achieved by widening the tax base, reducing the growth of revenue expenditure and providing innovative infrastructure funding.Along with these measures, the industry must adjust to moderate import tariff and agriculture output must grow at 4.5 per cent per annum. This was the prescription for the economy held out by the Governor of Andhra Pradesh C Rangarajan at the JRD Tata Memorial Lecture organised by Assocham here today.The former RBI chief said that infrastructure availability is a serious constraint in growth and in the future. The infrastructure investment needs are expected to be large due to the demand created by economic growth, rising population, urbanisation and the existing backlog. ``Infrastructure productivity will determine how the country will cope with the increasing pace of urbanisation, globalisation and technological innovations inmanufacturing,'' he added. According to Rangarajan, ``the process of deregulation and privatisation of core services must be supplemented by setting up statutory regulatory authorities for ensuring fair competition among public and private operators and protecting consumer interests.'' Heavy capital expenditure in four or five large infrastructural projects can begin the kick-off process, he added. Rangarajan added that sustaining a high growth rate in industrial production requires a high level of investment, a steady growth in agriculture and an improvement in the rate of growth of exports. Expressing concern over slowdown in export growth since 1996-97, when export growth decelerated from 20 per cent in dollar terms over the three-year period 1993-96 to 5.3 per cent in 1996-97 and 2.6 per cent in 1997-98, Rangarajan said that apart from removing procedural hurdles, ``we require a destination and commodity-wise analysis of exports which can help us get back to the higher growth path in relation toexports.''
