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“The target for 2013-14 is 6.5-7 per cent and then accelerate further. India has all the requirements to return to 8 per cent, even if it is later than expected,” Montek Singh Ahluwalia, deputy chairman of the Indian Planning Commission said yesterday.
Ahluwalia was addressing a gathering of students and academics at Oxford University.
“The focus of government policy is to reassure foreign investors that India is wide open for business. India has the human resources in place and an expanding private sector. The most important message is that India is a good bet for foreign investment and that message is getting across,” he said.
Ahluwalia suggested that media reports on the downturn of the economy have been exaggerated: “It is a worry because we expect much more but it is not as big a disaster as the media makes it out to be. Growth is important but that growth has to be inclusive and sustainable.”
The deputy chairman also emphasised that the global slowdown, recession in the US and the eurozone crisis need to be factored in when judging the growth rate of India.
“A little over 5 per cent is a slowing down but the whole world is experiencing a slowing of growth. The state of the world economy is a challenge.”
He also stressed that the pace of poverty reduction in the country was within the target set by the government.
“It is clear that the government knows how to get growth going but there is a perception that we lag behind on inclusiveness. It is something the government takes very seriously and latest data indicates that the pace of poverty reduction has increased.
“The extreme view that the rich are getting richer and the poor, poorer, is nonsense. There is a lot of good news in terms of the pattern of growth being more inclusive,” he said.
Ahluwalia noted, however, that the current account deficit is a big problem right now.
The former alumnus of the University of Oxford, who was invited by the Blavatnik school of government to speak about “India’s Challenges Ahead”, was in the UK on his way back from the G-20 Sherpas Meeting in Moscow.