Planning Commission's Deputy Chairman Montek Singh Ahluwalia is of the opinion that India can grow at 8-9% for the next 20 years with a supportive global environment, reports said.
Ahluwalia was speaking at a UN General Assembly debate on "State of the World Economy and Finance in 2012".
Ahluwalia cited several things that the global community should do to restore growth in the developing world. These included an early agreement on the resolution of the sovereign debt problem in the euro zone and a well functioning international financial system channelling resources efficiently around the world.
Calling for an early conclusion of the Doha Development Round to "send a major positive signal to the global community, Ahluwalia said: "The economic woes we face today cannot be overcome without the major developed countries taking the lead to stimulate economic growth."
Speaking separately at an interview, Ahluwalia reiterated the importance of raising fuel prices. He opines that the government should raise petroleum prices as part of tough decisions and to attract international investment.
"There is absolutely no doubt in my mind we just have to raise fuel prices," Ahluwalia said. In the case of petroleum, 80% of the fuel is imported “so not to charge for the price which you are being made to pay is basically bankrupting the petroleum sector. Either that or the budget has to bear a huge burden of subsidy and neither of those is sensible,” he added.
Ahluwalia underlined the need for restoration of fiscal credibility, action on the underpriced petroleum products and taking care of implementation bottlenecks in infrastructure projects as being measures that should be very high on the government's agenda.
Speaking on the current account deficit he said, "A 3% is a little on higher side and I will be a lot more comfortable with 2.5%. But if for a couple of years, you have to do 3% mainly because oil prices until very recently were fairly high."
Speaking on the rapid depreciation of the rupee he said the Reserve Bank of India, which has a lot of "ammunition" that it can use, has so far done the "right thing" in the way it has managed the currency fluctuation.
"I would hope that the rupee would not see any large depreciations or jumps. I would not particularly say that I am keen for it to appreciate either. Let the market push it one way or the other and as long as those movements are small I do not think there is too much to worry about."
Ahluwalia also insisted that inflation should be kept under tighter control.
He stressed that the real issue is a "quick return" to certainty in the financial markets in general, particularly in the context of Europe.
The "real danger" in the European case is not a slow growth, but since the financial uncertainties are not being properly managed, there is real risk of "financial disruption" which could have a spill over effects internationally.