New Delhi, July 3 (UNI) Maintaining that the world economy was going through an "exceptionally" difficult phase, Planning Commission Deputy Chairman Montek Singh Ahluwalia today said the Indian economy would clock a slower growth rate of 8 per cent in the current fiscal even though the medium and long term prospects were bright.
The Plan Panel Deputy Chief said fiscal 2008-09 by all accounts was a bad year for the world economy and India's growth rate would be impacted adversely.
It is for this reason that economic growth may moderate to about 8 per cent, instead of the targetted 8.5 per cent in fiscal FY08.
Asked whether the political storm over high inflation was misfounded as the actors did not understand that it was largely a result of abetment by external factors, Dr Ahluwalia said "I am not saying we should not be concerned about inflation and how to moderate it. I am only saying that external factors have contrbuted to India's inflation rate." "If in a year the world economy is going through its most difficult phase, then I think that Indian economy registering eight per cent growth is not a bad deal," Dr Ahluwalia told newspersons here.
He was hopeful that the slow down in the world ecoomy would bottom out next year and the India economy would stand to benefit from it.
Dr Ahluwala said all countries of the world have been imapacted by the global slow down, India beig no exception. The worst effect has come on developig countries.
Dr Ahluwalia said India infact was not much affected unlike some other countries and felt that the double digit inflation was mostly a result of external factors, including the soaring gobal crude oil prices.
The economist said the measures taken by the government and RBI would take some time to bring results on the ground. He,however, did not indicate the time frame in which this will happen.
Dr Ahluwalia, however, said inflation would not affect expansion of output in the medium or long-term basis.
He said the world was betting on India for this very reason.
Dr Ahluwaia, however, said controlling inflation was a short term challenge and would not affect growth rate on a medium to long term basis.
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