Deputy chairman of the planning commission Montek Singh Ahluwalia said there were signs of turnaround in the economy and GDP growth in the second half of the current financial year was poised to be better than the first half.
Ahluwalia expressed optimism that GDP growth in the second half would be better than 5.5 per cent and then in 2013-14, a target of 7 per cent could be fixed.
On present prospects, probably it would be 5.5 per cent for the fiscal but in the second half, there was a turnaround in sight and growth could even be around 6 per cent, he said. “Things are turning around but it is too early to be confident,” said Ahluwalia.
He added that government had given lots of signals what it wants to do and finance minister had got a credible program to bring fiscal deficit down from about 6 per cent in 2011-12 to 3 per cent by 2016.
Rapid clearance to the infrastructure projects was another focus area of the government, Ahluwalia stressed and added that tax related issues from the budget were being sorted out. “Other reforms in the pipeline are moving forward. We know what is required to be done domestically and we are doing more than that,” he said while addressing the closing session of the World Economic Forum – Deliberation to Transformation.
“My sense is that it is possible to target 7 per cent next fiscal if the problems are fixed. I think we can see a revival in investment. This time the government didn’t hold back reforms waiting for consesnsus. This is a test,” added Ahluwalia.
Paul Bulcke, CEO, Nestle, Switzerland, said, “Simplicity and consistency in policies is important for business. Making reforms explicit is one part implementation is other part and consistency was important here. Negativism creates anxiety. This country has an amazing potential of its own. Private investment can be part of it”.
Sidhartha Lal, MD and CEO, Eicher Motors, said that reforms had to be on a daily basis. “The speed of reform is important. There is reason to be optimistic about all this. It will be better if things move faster,” said Lal.
Ahluwalia said that almost two-thirds of what needed to be done wass in the hands of the state governments, which had got important implication.
Kris Gopalakrishnan, executive co-chairman, Infosys, pointed out, “It was important to say that we are back on track and it sends a very important signal.
But it is not enough, we have to do lot more. We have to make sure that we follow through. Things like land acquisitions and clearances have to follow. It is an interesting situation. Compromise is the art of negotiation. I am glad that process has started. The leadership has to create a positive story”.
Ahluwalia earlier also said that global economic situation was tough but was now better than five months ago.
