India’s gross domestic product (GDP) grew 5.5 per cent in the April-June quarter, up from 5.3 per cent in the preceding quarter, which Mr. Ahluwalia had termed as “good news”, even though he stopped short of calling it a “strong rebound”.
In the interview, Mr. Ahluwalia said that the immediate priority for the government was to show that the Indian economy, which is facing the risk of downgrades from rating agencies, is turning around.
The Union government had announced a string of reforms last month, including relaxing the foreign direct investment norms in aviation and multi-brand retail, and had hiked the price of diesel.
Though the move was welcomed by the market, rating agencies were skeptical, and said the reforms faced rollback risks. Late last month, HSBC cut its economic growth forecasts for fiscal 2013 and 2014 for India citing "the lack of reform traction", a more "challenging" global economic backdrop.
Mr. Ahluwalia called the hike in diesel price “an important step” to show that India is serious about getting back on the growth track, and said not much should be read into the quantum of the hike.
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