Despite price rise, 9% growth can be maintained: Montek

Even with inflation hitting double digits, Planning Commission deputy
chairman Montek Singh Ahluwalia on Tuesday said India would be able to
maintain 9% growth in the medium-term. "I believe the 9% growth rate
that we are talking about for the Indian economy can be maintained
even with present level of oil prices though some added measures will
be needed," he said.

Ahluwalia, however, said achieving targeted growth rate was a
difficult task considering rising inflation and a volatile global oil
market because the "actions to manage oil prices, improve efficiency,
reduce dependence on oil and look for other sources of energy become
more important". "We need to minimise our dependence on oil and should
look for alternate modes of energy," he added.

Admitting that rising inflation was a serious problem, Ahluwalia said,
"There is no reason to alter our medium-term objective."Rising oil
prices have pushed inflation to over 11% and the RBI is expected to
announce more measures to tighten monetary policy to check rising
prices. On oil prices impacting the growth rate, Ahluwalia said,
"Whether it will impact growth or not will depend on how we handle oil
prices. The commission is of the view that it is possible to handle
the oil price situation without hurting the confidence of investors in
the economy in the medium-term."