Short-term growth can be compromised for long-term prospects: Basu

Short-term growth can be compromised to contain higher inflation rate as the country needs to retain long-term growth prospects of the economy, said Kaushik Basu, chief economic advisor to the Finance Ministry. He said even if India grows by 8.2 to 8.4 per cent in the current fiscal, it will be higher than global standards.

He said the GDP growth rate, which was earlier pegged at nine per cent, plus or minus 25 basis points, for FY12 by the Ministry of Finance, will be revised by the government following monetary tightening measures by the Reserve Bank of India to contain inflation. “We have a target of an inflation rate of below six per cent by the end of March, 2012. Inflation is likely to come down in the next six months.”

He, however, maintained the government would not revise the fiscal consolidation numbers. “Despite rising crude oil prices, fiscal deficit target will not be revised. We will stick to 4.6 per cent of fiscal deficit, 3.4 per cent of revenue deficit and Rs 3.43 lakh crore of government borrowing plan,”

“FDI in multi-brand retail will increase efficiency of the supply chain management for agri products and will ensure higher price to farmers. It will also create opportunities for small producers to export their produce to international markets,” he said, adding, He also said many more jobs will be created by allowing FDI in the retail sector.