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23rd Ramadan 1435 | Wednesday, Jul 23, 2014
Business

Bitter medicine needed to get back to high growth path: FM

Saturday, 15 December 2012
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New Delhi, December 15:

Hinting at some tough measures in the coming days, Finance Minister P Chidambaram Friday said some "bitter medicine" is necessary to restore the health of the economy and get back to high growth path.

"Some bitter medicine has to be taken this year. We have to take some bitter medicine. There is no other way...This bitter medicine is good medicine. It will restore the health of the economy and next year we can look forward to much higher growth," he said.

Chidambaram was winding up a discussion on the first batch of supplementary demands for grants in the Lok Sabha.

After growing at over nine percent, the GDP slipped to nine-year low of 6.5 percent in 2011-12 and during the current year, as per the RBI projection, is estimated to be 5.8 percent.

The Finance Minister also expressed confidence that inflation, which has continued to remain a concern and a challenge, would moderate in the next two to three months.

"Inflation is a challenge. Inflation worries the government. While CPI inflation is sticky, good news is that WPI inflation seems to be trending downwards...If it trends downwards, there will be some reason for comfort," he said.

The WPI inflation, which is based on movement in wholesale prices, moderated to 7.24 percent in November from 7.45 percent a month ago. The retail inflation, however, was at 9.9 percent in November, up from 9.75 percent in October.

Later, amid walk out by BJP and Trinamool Congress, the Lok Sabha passed the first batch of supplementary demands for grants that seek to raise government expenditure by Rs 32,120 crore in 2012-13.

Of the total cash outgo of Rs 30,804 crore, Rs 28,500 would be towards oil subsidy and Rs 2,000 crore for rehabilitating Air India.

PTI

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