India to hit 6% growth next fiscal, says Montek

Enthused by the improvements expected in macro economic situation soon, Planning Commission Deputy Chairman Montek Singh Ahluwalia said on Friday India can achieve 6 per cent economic growth next fiscal and that the second half of this fiscal could be better than the first.

"I would hope that if my judgement, that the second half of the current (fiscal) year shows more than 5 per cent, then it is not unreasonable to expect more than 6 per cent in the next financial year," he told CNBC-TV18.

Ahluwalia's comments came ahead of the release of second quarter (July-September) Gross Domestic Product (GDP) data by the government.

India's gross domestic product grew at a decade low of 5 per cent last fiscal.

There seems to be persistent sluggishness in the economy so far as GDP growth slowed down to 4.4 per cent in April-June quarter from 4.8 per cent in January-March quarter this year.

The economy grew at 5.4 per cent in corresponding quarter (April-June) last fiscal.

Ahluwalia said he expected all political uncertainty, that is inevitably associated with the general election, will be over (by next year) and this would give enough legislative time for many held-up moves.

Explaining further, he said, ". . .for example one of the biggest things that would impact the economy and the investment climate is the goods and services tax."

". . . I am hoping that if early next year, after the general election, the GST is put through even if it is implemented several months later, the positive impact on expectations will be very high.

“So, going for 6 plus in fiscal year 2014-15 is a perfectly reasonable thing to do and then go to 7 per cent plus and then to 8 per cent is not unreasonable," he added.

Ahluwalia's assumption of improving macro economic scenario is based on the impact of good monsoon and expected improvement in current account and fiscal deficit.

Besides, he foresees the rupee pricing helping exporters and making domestic producers more competitive.

Image: Montek Singh Ahluwalia