Tendulkar 'bullish' on Indian economy

NEW DELHI: India's inflation rate will not stay high for long and the economy will continue to expand at a fast pace despite global developments, the new chair of Prime Minister's Economic Advisory Council has said.

“I continue to be bullish on India and the Indian economy,” said Suresh Tendulkar, who was Friday named Prime Minister Manmohan Singh's key economic adviser and the chair of his Economic Advisory Council.

“I expect the Indian economy to continue to grow at a fast pace. I am not just hopeful - I am quite bullish. A seven-eight percent sustained growth is not only respectable but also unprecedented,” Tendulkar, 69, said.

“There was a time when our economy grew by just three-four percent and what we see today is outstanding. What is more, we will also be able to maintain the high momentum of growth.”

India registered a growth of over nine percent in each of the last three fiscal years to emerge as the world's second-fastest growing economy after China, which has been expanding at 10 percent or higher.

Tendulkar - who has a master's degree from the Delhi School of Economics and Ph.D from Harvard as a Rockefeller Foundation scholar - said some key comments of the council would be presented to the government next week.

Speaking about the current trends in the price situation, he felt inflation was not a long-term problem and that a moderation was in the offing soon because of administrative and monetary measures.

“High inflation is not here to stay. I expect it to start moderating in the next few months,” he said, even as India's inflation rate based on wholesale prices shot past the 12-percent mark.

On economic reforms, which had slowed down because of the opposition from Left parties that were propping the United Progressive Alliance (UPA) government from outside, Tendulkar said they were much needed for overall development.

He identified divestment of government equity in state-run units, reforms in the financial sector and relaxation of labour laws as three areas that needed urgent attention of the government.

“I do understand these are sensitive issues. At the same time if the government goes aggressively, on say, selling equity in public sector enterprises, it will certainly help,” he added.

He also referred to the strike call by employees of state-run Bharat Sanchar Nigam Ltd (BSNL) against the proposed initial public offering to drive home the point that sale of state equity will not be an easy task before the government.