The economic slowdown in India is due to the tight monetary policy which has impacted investment and consumption, finance minister Pranab Mukherjee said on Tuesday. “A tight monetary policy has impacted investment and consumption through higher cost of credit.”
However, he said that the policy measures would ease capital control and make additional resources available to the infrastructure sector.
The slowdown would be temporary and the economy would soon be back on the high-growth trajectory, he said, adding, India needs to target a double-digit growth rate in the near future.
India’s GDP growth for 2011-12 is estimated to drop to a three-year low of 6.9% from 8.4% a year ago.