India must follow a mix of monetary and fiscal policies : N K Singh

To maintain the India growth story and to control inflation, the country should go for a mixture of monetary and fiscal policies, N K Singh, former Planning Commission member and a member of Parliament has said.

“In order to contain inflation and to achieve a nine per cent growth predicted, you need to have a combination of both monetary and fiscal policies. It would be better instead of a disproportionate reliance on monetary policy. We should have to relook at the entire expenditure management,” Singh, who is also the deputy chairman of planning commission, government of Bihar, said on the sidelines of an Indian Chamber of Commerce meet here on Monday.

On the back drop of the Planning Commission forecast that during the 12th Five Year Plan period the country is set to grow nine per cent, he said, “Due to the economic situation abroad, we should not scale down our growth target. If we do it, it means that the improvement in different sectors will be further postponed. The right approach is not to scale down, but to try and meet the challenges.” The National Development Councils (NDC) is set to meet on October 15 to approve the draft to the 12th Five-Year Plan (2012-17).

Regarding the growth story of Bihar, he said []’that the state needs to post a growth of atleast 12 per cent per annum for the next eight years to reach the national average. The state was posting a growth of almost 16 per cent for the last few years, which is one of the highest in the country.

However, Singh raised concerns that the crisis in the Eurozone and the United States is going to affect the country more than expected. “It may not be easy for us to diversify exports markets quickly. So, we should implement financial reforms which are pending for a long time,” he added.