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Need to tap domestic sources of growth: Raghuram Rajan

Posted on Dec 13, 10:38PM | IANS

India's Chief Economic Advisor Raghuram Rajan Thursday stressed the need to tap domestic sources of growth as the economy will continue to be influenced by developments overseas.

"Clearly India will be influenced by growth constraints in Europe. After all our exports are part of the production. So If exports are declining as it has been recently, it will obviously going to have influence on the economy," he said.

The country's exports in November contracted 4.17 per cent year-on-year for the seventh month in a row to USD 22.2 billion, owing to falling demand in the US and European markets.

Rajan said economic growth seemed to be stabilising and efforts should be made to strengthen the recovery process.

"Hopefully, economic growth is stabilising. Certainly every move that government is trying to make (will) help to strengthen growth."

Rajan was speaking at a briefing to announce the international conference on 'reviving growth', being organised here by the department of economic affairs of the finance ministry Dec 14-21.

On the factory output data released Wednesday, Rajan said: "We should not be overtly influenced by one number because issues of base effect are there... We should take it as part of a pattern."

India's Index of Industrial Production (IIP) grew at a faster-than-expected 8.2 percent in October. It had contracted 5 percent in the year-ago period.