Fiscal consolidation road map will help in achieving 8-9 per cent growth: Kuroda

Painting a rosy picture in the midst of gloom and doom with various multilateral lending agencies scaling down their projections on India’s GDP (gross domestic product) growth, the Asian Development Bank (ADB) on Friday stated the government’s fiscal consolidation road map would help in getting back to a high growth trajectory of 8-9 per cent in the years ahead.

Addressing a press conference here on his India visit, ADB president Haruhiko Kuroda said: “The government is, I think, taking quite appropriate fiscal consolidation efforts and measures. Indian economy is likely to recover in 2013 fiscal year…”

“I understand that [the] Indian government has been taking this appropriate policy stance so that, over the medium-term, full potential of the Indian economy can be realised. I personally think that Indian economy can achieve eight to nine per cent growth annually in medium to long term,” the ADB chief said while pointing to certain measures that the government has been taking to consolidate the fiscal situation and gradually reduce the deficit.

Mr. Kuroda, however, pointed out that while no strong signs of recovery had appeared as yet, the ADB was “reasonably sure” that the Indian economy would be recovering soon. Incidentally, the Manila-based lending agency is slated to come out with its latest projection on India’s GDP growth during the first week of April.

While the country’s economy is likely to slide to a 10-year low of about 5.70-5.80 per cent from a revised estimate of 6.2 per cent in 2011-12, a recovery is expected in 2013-14 following the various reform measures in place and in the pipeline and with investments picking up.

Earlier in the day, Mr. Kuroda called on Finance Minister P. Chidambaram to discuss issues with regard to the annual meeting of the ADB later this year with India in the chair. The 46th ADB annual meeting, the third such in India, is scheduled at India Expo Mart in Greater Noida from May 2-5.

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