‘India has to keep growth going amid rising prices’

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Alderman David Lewis, the Lord Mayor of the City of London, has said India would have to keep economic growth going, as inflation rises, to avoid serious problems.

In an exclusive interview with FE on Wednesday, the Lord Mayor, who is the representative of the financial services industry in the Square Mile of the City of London, said rising inflation was a major challenge for India, despite the fact that economic growth was good.

“I think there are challenges for India. Yes, you’ve got good growth, but there are signs of it reducing. At the same time, inflation is rising. If it continues going up, you’ve got real practical problems. Stopping rice exports and such measures may be some temporary help. In China, for instance, it’s clearly going in the wrong direction. You’ve got to keep growth going. It’s OK if growth’s going up and inflation is going up, but if growth’s going down and inflation is going up, you’ve got problems.”

The Lord Mayor, who is on a 12-day tour of India, has already met industry leaders in Chennai, and is now in Mumbai, after which he is slated to visit Pune and New Delhi.

This year, the Lord Mayor has led a business delegation of over 50 people, the largest ever such group brought by a Lord Mayor to India.

Said the Lord Mayor: “The Indian economy has been doing extremely well, with GDP growth of between 7% and 9% for several years, which we congratulate the Indian government on. But there are challenges ahead, clearly, with inflation. Inflation seems to be going up monthly, not just here but also in the rest of the world and something which is difficult to control because a lot of it relates to food prices and basic raw materials which is affecting everyone around the world.”

Pointing out that inflation has been worrying China even more than India, he said: “It’s a difficult global problem, not just a local problem. It’s a problem that needs to be addressed.”