Inflation not a priority: Ahluwalia

Underlining the perception that India's lending rates are not likely to harden in a hurry, Planning Commission deputy chairman Montek Singh Ahluwalia today reiterated that economic recovery was more important at the moment than checking inflation.

"We need to ensure economic recovery that provides jobs. It's more important to provide jobs than trying to lower inflation," Ahluwalia said on the sidelines of a United Nations human development conference in New Delhi today.

Ahluwalia also insisted that India's economy would grow at the government-predicted rate of 6.3 per cent this fiscal, while inflation would remain under 5 per cent. This flies in the face of a FICCI report, also released today, that GDP growth may sink to 5.4 per cent due to the poor monsoon. (See: Drought may squeeze GDP growth to just 5.4 per cent: study)

"The GDP (gross domestic product) would be at 6.3 per cent by the end of this fiscal, as predicted, but could be even better given the signs of economic recovery," Ahluwalia said. He added that inflationary pressure would start easing and was not expected to go beyond 5 per cent at the end of this fiscal.

"Though drought conditions are still there and would have their negative effect, its impact would be much lesser with the economy on the revival path," Ahluwalia said.

'Corporate salaries must be cut'
Agreeing with corporate affairs minister Salman Khurshid that 'India Inc' should cut back on salaries of top executives, he said the corporate sector should address this issue. Khurshid had said earlier that the salaries of top executives of private companies must be trimmed in line with the UPA government's much-publicised austerity measures. (See: Khursheed bashes 'vulgar' corporate salaries)

Incidentally, the peculiarly hybrid term 'India Inc' has been widely adopted by the media - and hence the ruling powers - to mean corporate India. The official terms to indicate a cpmpany's legal structure is either 'Ltd' or 'Pvt Ltd'; no Indian company can actually be labelled 'Inc'.