He called for greater attention to linking economic policy making with external and internal security.
Speaking on ‘Indian Economy and National Security’ at the 49th Foundation Day of the Institute for Defence Studies and Analyses here, Ahluwalia said poverty had declined much faster since the United Progressive Alliance (UPA) government came to power.
“Eight percent growth can only be achieved if large number of difficult policy decisions are taken. We should be girding up our loins to move at eight percent,” Ahluwalia said.
He said if there were policy logjams, Indian economy will grow at “5-5.5 percent.”
Ahluwalia said eight percent growth cannot be achieved “without much greater inflow of technology, trade and investment”.
“We actually need to encourage a lot of foreign investment. Technology is indistinguishable from investment flow,” he said.
He said self-reliance should mean being “able to pay for anything we import”.
Ahluwalia said the poor should have a stake in the system as no growth was viable if it did not benefit the poor.
“Since 2004 there has been much faster decline in poverty than in 1993-94,” he said and added the decline had been three times faster till 2011.
He said states considered backward were moving rapidly but expectations of people were also rising.
Ahluwalia said there were suggestions that focus should now be on backwardness on districts and individual blocks.
He said the government sector was not good at absorbing technology.
“We are not good at creating flexibility to allow new technology to come in. (We have to do) a lot in the government,” he said.
Ahluwalia said growth in India was taking place “in extraordinary low level of per capita income, high democratic participation and when communication revolution has moved far ahead”.
He said India was deficient in energy and needed to diversify its resources.
Ahluwalia urged analysts to look at national security and economic development in a holistic manner.
Later, answering queries from mediapersons on a report by investment bank Goldman Sachs upgrading the Indian markets on the likelihood of Bharatiya Janata Party’s prime ministerial candidate Narendra Modi coming to power, he did not give it credence.
“No idea what Goldman Sachs means,” Ahluwalia said.
On Modi’s criticism of UPA government’s economic performance, Ahluwalia said most of the attacks were ill informed.