New Delhi: India can maintain 9% growth rate in medium term with added efforts despite soaring prices of oil in the international market, Planning Commission Deputy Chairman Montek Singh Ahluwalia said.
“I believe that the 9% growth rate that we are talking about for the Indian economy can be maintained even with present level of oil prices,” he told reporters.
However, he added, the task of achieving high growth becomes more difficult because the “actions to manage oil prices, pass on oil prices, improve efficiency, reduce dependence on oil and look for other sources of energy become more important.”
Stating that rising inflation was a serious problem, Ahluwalia stressed that “there is no reason to alter our medium term objective.”
India has achieved over 9% Gross Domestic Product (GDP) growth rate in the past three years and economic think tanks are predicting that there would be moderation in the growth during the current fiscal.
On how the oil prices will impact the growth rate, Ahluwalia said, “Whether it will impact growth or not will depend on how we handle oil prices.”
The Commission, he added, was of the view that it is possible to handle oil price situation without hurting the confidence of investors in the economy in the medium term.
Pointing out that it is difficult to say what will happen in the next three to six months, he said the growth momentum can be maintained even with current level of oil prices.
“Soaring oil prices have pushed the inflation rate to more than 11 per cent and the Reserve Bank of India is expected to announce more measures to tighten monetary policy to check rising prices.”