Recovery process has begun: Montek

Planning Commission Deputy Chairman Montek Singh Ahluwalia on Monday turned bullish on the economy saying “the recovery process has begun”

Written by ENS Economic Bureau | Mumbai | Published: October 16, 2012 1:03 am

Planning Commission Deputy Chairman Montek Singh Ahluwalia on Monday turned bullish on the economy saying “the recovery process has begun” that will lead to a higher growth rate of 6 per cent or higher in the second half of 2012-13.

Simultaneously,pitching for a rating upgrade,he said,“The real issue for rating agencies,if they are reading the signals right,is whether they’re going to remove the negative watch (on India).”

“The first half of FY’13 is expected to grow at 5.5 per cent which will further improve during second half of FY’13 to 6 per cent or higher,driven by the current initiatives that the government is taking,” Ahluwalia said while addressing a banking summit organised here by Yes Bank and FT. The growth projections recently given by IMF for the economy’s growth rate at 4.9 per cent were based on the market price model,while India calculates GDP in constant prices at factor cost,he clarified.

He said the government “recognises the growth has slowed down,and it requires a correction”. “Further,the slowdown is not only because of global slowdown but also because of many domestic issues,some of them relating to procedural and implementation difficulties. In the last four weeks,the government has taken number of steps,and a major task for the government is to demonstrate that slowdown has ended,” he said.

According to him,the growth will be investment led,and “we need to bring back ‘animal spirits’ in investors”.

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