India can grow 8-9 percent despite challenges: Montek (Lead)

May 18th, 2012 - 8:09 pm ICT by IANS  

New York, May 18 (IANS) India can grow at 8 to 9 percent for the next 20 years despite many domestic challenges, Indian Planning Commission’s Deputy Chairman Montek Singh Ahluwalia said and urged the international community to take supportive measures like resolving the European sovereign debt problem and concluding the Doha Round of trade libralisation talks early to achieve this.

“We believe India has the potential to grow at rates between 8 and 9 per cent for the next twenty years and to do so in an inclusive manner,” Ahluwalia said participating in a United Nations General Assembly debate on “State of the World Economy and Finance in 2012″ Thursday.

“There are many challenges we have to face domestically to achieve this target, but we believe we can do so,” he said.

“We are willing to work with others to make it so,” he added.

The Indian economy grew at an average rate of 9 per cent in the five years prior to the 2008 financial crisis. The growth slowed down to just over 7 per cent following the crisis.

He said India would be greatly helped in achieving the traget if the global community took steps to restore growth in the developing world.

“The economic woes we face today cannot be overcome without the major developed countries taking the lead to stimulate economic growth.”

These included an early agreement on the resolution of the sovereign debt problem in the eurozone and a well functioning international financial system channelling resources efficiently around the world.

“Early resolution of the eurozone crisis would remove much of the uncertainty which currently pervades financial markets and which affects investor sentiment adversely”, Ahluwalia said.

He said it was satisfying to note that growth rates have remained more robust than many would have expected, particularly when expansion in the developed countries has been hit hard by the financial crisis.

“This ‘growth resilience’ reflects the fact that large numbers of developing countries now have stronger human and institutional capacities to grow. These economies are not de-linked from industrialised countries; the links are strong, but they operate on a higher underlying growth potential,” he said.

“Given the much higher growth potential in developing countries, a well functioning financial system should ensure a sufficient flow of long-term capital towards them,” he added.

Ahluwalia also called for an early conclusion of the Doha Development Round to further liberalise world trade. “The economic woes we face today cannot be overcome without the major developed countries taking the lead to stimulate economic growth.”

The Doha Round of trade negotiations among the World Trade Organisation (WTO) members aims to achieve reforms of the international trading system through introducing lower trade barriers and revised rules.

Ahluwalia also said steps at the national level must be accompanied by a broader based advance in improving global governance by allowing more voice and participation for important developing countries in the decision-making structures of the international financial system.

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