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Growth could be lower than 8% this fiscal, says Montek

Planning Commission deputy chairman Montek Singh Ahluwalia today said the country's economic growth could be lower than 8% this fiscal.

business Updated: Oct 19, 2011 23:14 IST

Planning Commission deputy chairman Montek Singh Ahluwalia on Wednesday said the country's economic growth could be lower than 8% this fiscal.

"Clearly, we are affected by the European-global economic slowdown. Our economy is also affected. We had estimated this year, it would grow at 8%, but it could be lower, quite frankly..," he told reporters in Chennai.

However, he exuded confidence that if the global economy stabilised during this financial year, "India's prospects are very good".

On Tuesday, in Hyderabad, he had said that the economy will grow by around 8% this fiscal.

"In the 12th Five-Year Plan, we have set a target of nine% growth. We are hoping to have clear discussions with the chief ministers in the National Development Council Conference in a couple of days. I hope we will get a consensus," he said.

Earlier delivering the V Sankar Aiyar Memorial Lecture on "Economic Reforms for Inclusive Growth", Ahluwalia said India was becoming a huge coal importer after petroleum products and emphasised on the need to address the growing demand for energy.

In order to sustain stronger GDP growth, the country needed to address issues like agriculture, energy, water and urbanisation, he said.

He cautioned India and the rest of the world are moving into a period when energy prices are going to be 'high'.

"Presently, most of our electricity boards have not increased the tariff for the last 10 years. There has to be an energy transition for rapid moving..", he said.

He also noted that availability of water would pose a problem to sustain higher GDP growth.

"There is some possibility for increasing the supply of water... It means changing the way we do agriculture, it means introducing newer methods of waste water treatment," Ahluwalia said, adding, "Projecting 10 years ahead, this (issue) can be a major problem."

The country needs to have inclusive growth and there is a need to ensure that GDP growth does not "decelerate", he said.

First Published: Oct 19, 2011 23:11 IST