According to the WT/TPR/G/249, pages 14 and 15, §§ 34 and 37, inflation and fiscal deficit in India during 2010 11 were 9.5% and 4.7% of GDP, respectively. Which is the highest priority to India: inflation control or GDP growth? Can the control of the public deficit be the determinant of this choice?
Reply: GDP growth is the major economic objective in the long run. The inter se prioritization in the short run is to strike a balance between higher growth and acceptable levels of inflation, which in inevitable in a growing economy. Fiscal policy and consequently consolidation is a major instrument for achieving macroeconomic dividends of growth and stability in prices.
