Augusto Lopez-Claros, Chief Economist, World Economic Forum, Davos, talks to Arindam Mukherjee.
On India's growth prospects: It's difficult to achieve a high gdp growth when you have recorded an 8.2 per cent growth in the previous year. Yet, in the short term, the outlook is bright for the Indian economy as the government is going through a favourable patch—interest rates are low and FDI is coming in and fundamentals look healthy.
On controlling the budget deficit: In India, the deficits are quite visible. The FM said he wanted to attract FDI of $150 billion. That is possible but you have to create conditions to attract investors. Investors like the large and growing market in India and also the stable democratic polity. But the big grey area is infrastructure, and the role of the public sector and the policies on it are also not very clear.
On a longer term, to maintain this growth tempo over the next decade or so, a lot of fiscal consolidation is required. The banks have to play a more prominent role, not just as cashier to the...