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Bitter medicine needed for growth: FM

December 14, 2012 16:47 IST

GrowthHinting at some tough measures in the coming days, Finance Minister P Chidambaram said on Friday some 'bitter medicine' is necessary to restore the health of the economy and get back to high growth path.

"Some bitter medicine has to be taken this year. We have to take some bitter medicine. There is no other way. . .this bitter medicine is good medicine.

"It will restore the health of the economy and next year we can look forward to much higher growth," he said.

Chidambaram was winding up a discussion on the first batch of supplementary demands for grants in the Lok Sabha.

After growing at over nine per cent, the gross domestic product slipped to nine-year low of 6.5 per cent in 2011-12 and during the current year, as per the RBI projection, is estimated to be 5.8 per cent.

The Finance Minister also expressed confidence that inflation, which has continued to remain a concern and a challenge, would moderate in the next two to three months.

"Inflation is a challenge. Inflation worries the government. While CPI inflation is sticky, good news is that WPI inflation seems to be trending downwards. . . If it trends downwards, there will be some reason for comfort," he said.

The WPI inflation, which is based on movement in wholesale prices, moderated to 7.24 per cent in November from 7.45 per cent a month ago.

The retail inflation, however, was at 9.9 per cent in November, up from 9.75 per cent in October.

Later, amid walk out by BJP and Trinamool Congress, the Lok Sabha passed the first batch of supplementary demands for grants that seek to raise government expenditure by Rs 32,120 crore (Rs 321.2 billion) in 2012-13.

Of the total cash outgo of Rs 30,804 crore (Rs 308.04 billion), Rs 28,500 would be towards oil subsidy and Rs 2,000 crore (Rs 20 billion) for rehabilitating Air India.

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