“Yes, we are going through a couple of months of slowdown ... I expect the economy to begin to do better even before the end of this fiscal year," Basu said at the Hindustan Times Leadership Summit here.
India"s economic growth rate slipped to 6.9% in the second quarter this fiscal, the lowest in nine quarters. It was 8.4% in the corresponding period last year.
Meanwhile, finance minister Pranab Mukherjee said economic growth will moderate to about 7.5% in the current fiscal, lower than the earlier projection of 9%.
Slackening investments amidst high interest rate regime is seen as one of the major reasons for slowdown in economic activities in the country.
“The drop in investment that is occurring now, is it going to last for very long, I don"t think so," he said.
Since there has been large investments in the country in the past, Basu said, adding, “This is a temporary downturn. I expect a pick-up, not a sharp pick, in the final quarter of this year so India should be growing much faster in the final quarter than the second quarter."
He said the full recovery will take a bit longer.
“If you look at the global scenario...6.9% growth is actually a very good performance. We were doing better," he said.
Basu said though the global situation has an impact on India as well, there are “things we need to do". “We need to rethink in our own policy...lot of responsibility is in our own hands...," he added.
On FDI in multi-brand retail, which has created a political storm in the country, he said it is time for India to “open up" and take up modernization that will come through FDI in multi-brand retail.
Basu said, “We will have to keep in mind that when a big change takes place there will be a short period of turmoil".
He said once FDI comes into the sector, it will benefit both farmers and consumers.