Exuding confidence that economy will be back on high growth trajectory, Planning Commission Deputy Chairman Montek Singh Ahluwalia on Wednesday said that GDP will expand by over 6 per cent next fiscal year and performance will be better in second half of the current fiscal year (FY14).
"I could easily say that it (economic growth) will be over 6 per cent, depending upon the policy of new government," Mr Ahluwalia said addressing an event of Indian School of Business here.
"I think it (revival in the economic growth) will be evident in the next six months. Next year on the other hand, we can reasonably expect a very strong improvement in performance," he said.
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"I expect the second half of current year (fiscal) to be better than the first half. I don't think that at the moment, we see signs of strong revival yet. But I do get a picture that people think that the (decline) in the economy has bottomed out," he added
India's gross domestic product (GDP) grew at a decade-low of 5 per cent in FY13.
There seems to be persistent sluggishness in the economy 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 had grown at 5.4 per cent in the corresponding quarter of April-June last fiscal year.
Later talking to reporters, Mr Ahluwalia said, "The current account deficit will be between 2.5 to 2.7 per cent of GDP this fiscal."
The current account deficit is the difference between outflow and inflow of foreign exchange.
It was at $88.2 billion or 4.8 per cent of GDP in the last fiscal year (FY13). The Finance Ministry expects it to be at $56 billion or less this financial year.
Mr Ahluwalia also said that many of actions taken (by the government) will allow investment to flow in.
Regarding allegations on allocation of coal blocks and spectrum, Mr Ahluwalia said, "The root cause of these problems was the system in place to allocate the scarce resources which was there before the (UPA) government came in."
"So this was the legacy system, the volume of activity expanded tremendously because this was a period of rapid growth," he said.
"...system change is that all coal blocks should be auctioned and all spectrum should be auctioned."
He opined that the government was willing and transparent to face the investigations into all those allegations.
On foreign investments into the country, he said the moods will change in favour of India even if the growth rate reaches 7 per cent (as against higher growth estimates in VIIIth plan).
He however, felt that the government needed to improve infrastructure and put it on the top of its agenda.
Growth will not slow down though general elections are scheduled to be held in six months, as the current issues that the country is faced with are not structural related problems, according to Mr Ahluwalia.
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