The Hindu Business Line : 9% growth over medium term possible, says Montek

Hyderabad, June 28 The country would be able to maintain nine per cent growth rate in the medium term despite the recent increase in oil prices internationally, Mr Montek Singh Ahluwalia, Deputy Chairman, Planning Commission, has said.

Speaking to the media after addressing a seminar organised by the Administrative Staff College of India and World Bank here, he said even if it meant putting a bit of a brake to the monetary policy for a couple of quarters, which might lead to growth being a bit slower, it could be made up later.

“This year, the range of forecast is between eight and 8.5 per cent growth rate. I will be happy with eight per cent. The Reserve Bank of India has a role to play in taming inflation,” he added.

India has achieved over nine per cent GDP growth rate in the past three years and analysts have predicted that there will be moderation in growth during the current fiscal.

“One should not be concerned about the short-term phenomena. Even if it is slightly lower than eight per cent as predicted by the analysts this year, it can always be made up the next year,” Mr Ahluwalia said.

Oil impact

Commenting on the recent surge in oil prices, the Deputy Chairman said that they were at an unreasonably high level and hoped that it would stabilise at a reasonable level soon.

He said that inflation was a problem and the Government was doing everything it can to bring it down.

“When you are faced with an inflation coming because of major changes in world prices, it takes some time to bring it under control. Hopefully in a few months it will start coming down,” he said.

Small states

Earlier, while addressing a conference on Growth and Development in the Lagging Regions of India, Mr Ahluwalia said there was no evidence that small States were doing badly.

“On the other hand, small regions were doing quite well. Size of a State should not influence growth,” he added.

“No State in the last 10 years has actually got poorer. However, a couple of them might not have grown as fast as the country’s average, which has hampered convergence. It is also not true that the richer States have done well and poorer ones have done badly,” he said.

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CMIE retains GDP growth forecast at 9.5%
Moody’s sees slowing of GDP growth to 7.7% this fiscal

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