Robust revival of Indian economy next fiscal: Montek Ahluwalia

By Rajeev Ranjan Roy

New Delhi, Aug 31 (IANS) The slowdown in the Indian economy has been on expected lines and a robust revival is seen next fiscal year thanks to the measures being taken by the government, Planning Commission Deputy Chairman Montek Singh Ahluwalia has said.

"The slowdown was not unexpected," Ahluwalia said, referring to the sharp dip in the growth of India's gross domestic product (GDP) to 7.9 percent in the first quarter of this fiscal from 9.2 percent in the like period of last year.

"What I also want to say is a growth of almost eight percent is also healthy and impressive. We should expect revival to a higher level next fiscal," Ahluwalia told IANS in an interaction.

He said the tight monetary policy of the Reserve Bank of India (RBI), in a bid to curb price rise, was one of the main reasons for the dip in manufacturing growth from 5.6 percent from 10.9 percent in the first quarter of last fiscal.

"So you can also expect the inflation rate to start moderating from the next few months," said the Oxford-educated economist, who had started his career with the Washington-based World Bank.

"Inflation will begin softening within a few months time. The prices of crude oil appear to be softening in the global market. Good monsoon will make a big difference," said Ahluwalia.

India's central bank had also pruned the growth projection to 8 percent, from 8.5, percent because of global and domestic developments when it reviewed its monetary policy for the current fiscal late last month.

Ahluwalia also expected reforms to get a big push forward, especially in the area of public-private partnerships in infrastructure projects, covering roads, ports, airports and energy.

"Lot of good things are happening in the states. Some of them are quite ahead in inking infrastructure projects through the public-private partnerships (PPPs)," he said.

"Andhra Pradesh, Gujarat, and Maharashtra are doing very well in developing airports through the PPP model. Andhra Pradesh is getting metro train for Hyderabad through PPP. Even health facilities are being upgraded in collaboration with the private parties."

"Many states want to have metro trains. As a metro project is very expensive, the states should and are looking for private collaborators. The centre will certainly chip in with viability gap funding wherever necessary," he said.

In the same vein, Ahluwalia said that there was a need to implement the projects at a faster pace to retain the growth momentum.

"Infrastructure projects intended for capacity building have to be implemented with a strong supportive policies and administrative support," he said.

"Accelerating the pace of PPP contracts in infrastructure is extremely important. Policies have already been shaped, and the ministries are required to the projects fast. I think quite a lot has been done," said Ahluwalia.