Planning Commission Deputy Chairman Montek Singh Ahluwalia, on Friday, said that the country could achieve a growth rate of 6.5-7 per cent in the current financial year.
“Growth has decelerated more than we expected. We should see a turnaround……of 7.5 per cent growth. But we can have a growth of 6.5-7 per cent. This is possible,” said Mr. Ahluwalia, while talking to reporters on the sidelines of 29th SKOCH summit, which was discussing on ‘Refuelling growth'. The economy recorded its lowest growth level in nine years at 5.3 per cent in the fourth quarter of last financial year ended March 31, 2012.
Even though Mr. Ahluwalia refused to comment on whether the Reserve Bank of India (RBI) was likely to cut rates when it reviewed its monetary policy on June 18, he said “Inflation is not at comfortable level….. But monetary policy should be forward looking.” He said that while the repo rate (short-term indicative policy rate) was playing an important role, a long-term view on rates was also important.
He said the Government was doing everything to remove supply-side “constraints”. Citing the example of the power sector, Mr. Ahluwalia said that “We made lot of progress in power generation. But fuel is a constraint.” He said the country was not able to get enough coal for the power generation. On the European debt crisis, he said, “I don't see any specific impact on India…. There is no crisis for Indian banks… We don't have any exposure to European assets.” Earlier, speaking at the summit, U. K. Sinha, Chairman, Securities and Exchange Board of India (SEBI), said that there was a need to revive investor sentiment in the market to gear up the growth rate. Citing pension reforms, Mr. Sinha said that money lying with pension funds was yet to come to the market.
Saying that the SEBI had taken several measures to protect the investors, Mr. Sinha said that the ‘call auction' introduced in the pre-open session while listing the shares after its initial public offerings (IPOs) benefitted the investors as volatility was not seen in these listings after the introduction of this regulation.