Rangarajan to head investment & savings panel

The Government has set up a high-powered committee under the chairmanship of C Rangarajan, who currently heads Prime Minister’s Economic Advisory Council...

The Government has set up a high-powered committee under the chairmanship of C Rangarajan, who currently heads Prime Minister’s Economic Advisory Council, to review estimates of savings and investments in the economy and suggest improvements in the methods of data calculation.

The panel will have Planning Commission member Kirit Parikh, IIM-Ahmedabad professor Ravindra Dholakia and EPW Research Foundation director S L Shetty. Economic Advisory Council member Saumitra Chaudhuri and Central Statistical Organisation additional director-general Ramesh Kolli will also be part of the committee, a Reserve Bank statement said.

“In light of the higher growth path of the economy, (the committee will) undertake critical review of the available estimates of domestic and national savings and investments in the economy… with respect to database, methods of estimation, reliability and interpretational significance,” says the terms of reference of the committee.

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The panel is expected to submit its report in six months. It will examine whether the rapid financial deepening in the economy is getting reflected in the estimates of financial savings and suggest improvements, if necessary. It will also suggest improvements in methods and procedures used in estimation of corporate investment and savings.

Apart from this, the committee will recommend methods to strengthen public sector savings and investment estimates by taking account of municipalities, city corporations, gram panchayats and other local governments in addition to an increase in private participation in public investment.

The committee will also review the existing methodology and suggest improvements in the estimation of capital formation at the regional level, the RBI said.

The job ahead

• Will review estimates of savings and investments in the economy

• Suggest improvements in the methods of data calculation

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• Will examine whether the rapid financial deepening in the economy is getting reflected in the estimates of financial savings and suggest improvements, if necessary

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