Espying signs of a turnaround, Deputy Chairman of Planning Commission Montek Singh Ahluwalia said the economy will see stronger growth in the second half of current fiscal.
He also sees States playing a pivotal role in pushing reforms ahead and enabling growth. “Two-thirds of what needs to be done is in the hands of States,” Montek Singh said at the closing plenary of the World Economic Forum on India here. It was not impossible for India to achieve a growth of 7 per cent next fiscal, he said.
His remarks on signs of turnaround in economic growth are significant as they come against the backdrop of India’s growth rate on a slide for four successive quarters. The economy grew 5.5 per cent in the April-June quarter.
The recent reforms in foreign direct investment have raised hopes and signalled the Government’s intent to move forward even without political consensus. Montek Singh recognised the frustration over the slow pace of implementation.
He however said that reforms are not things where if someone signed an order, it would get done. “We are trying to create new institutions, as well as empower institutions that already exist” He also said that there were enormous variations across States on economic and social indicators. This was not getting reflected when one looked at the combined national picture. States are now competing with one another on various critical areas, he said, adding that most will do well. “In due course, all will do well.” On fiscal deficit, Montek Singh said he saw no reason why the revised target of 5.3 per cent of GDP should not be achieved.
On the global economic conditions, he said the situation is better now than five months ago. European leaders have taken actions to avoid the break-up of the euro. The recent political changes in the US have removed some of the uncertainties of the impending fiscal cliff faced by the world’s largest economy.
Montek also said that India has a very strong interest in Doha Round of trade talks succeeding and called on global leaders to show the way forward.