Indian economy won’t slow down: Montek


New Delhi : Planning Commission Deputy Chairman Montek Singh Ahluwalia Friday said that any slowdown in the world economy would not have much impact on the Indian economy.

Support TwoCircles

“Any slowdown in the world economy would not slow the growth rate of our economy by more than half a percent. In the worst case, the percentage could be one percent, but that appears to be highly unlikely,” Ahluwalia said at the annual general meeting of the Federation of Indian Chambers of Commerce and Industry (FICCI) here.

With a growth rate of 8-9 percent, he said the Indian economy was on a stronger footing, but underlined the need of institutional development in the finance sector.

“The government has set up a high-level committee to look into the different aspects of the finance sector and accordingly suggest corrective measures along with the roadmap for the next 10 years,” Ahluwalia said.

“The development of a healthy financial system is much more important than the interest rates. We need to see whether the financial sector is moving with the required pace or not,” he added, admitting that the pace of change has been slow in India.

Underlying the role of agriculture in the country’s overall economic growth, Ahluwalia said that the focus must be on multiple products.

“There is no quick fix solution to the slow growth rate in agriculture sector, suffering from structural weaknesses for several years. We must think in terms of transferring technology to the farmers,” he said.

Given the scope for the private sector role in agriculture, Ahluwalia said they should actively involve themselves in managing the perishable agro-products.

“A four percent growth rate in the agriculture sector depends upon private partnership. We need to diversify agriculture at a large scale. Let’s think of contract farming,” he said.