India's growth depends on fate of Eurozone: Basu

KOLKATA: India's growth next fiscal would depend upon the outcome of the Eurozone debt crisis, Chief Economic Advisor to the Finance Ministry Kaushik Basu said today.

Basu said while the ministry's GDP growth forecast for current financial year was 7.4 per cent to 8.2 per cent, next fiscal would depend on what happened in the Eurozone.

He said if there was a break-up in the Eurozone, then Greece would be out, following which both Italy and France would be affected as there would be a risk of default by Greece.

The US had an indirect exposure in Italy also, he said. However, he said since the US had its own central bank, the Federal Reserve would have the capacity to bail out the country, unlike the European Union which had only the European Central Bank.

"Break-up of the Eurozone is not impossible," he said here at an event. In that case, India's growth next year would be low.

Basu said it was expected that the European leaders would be able to avoid a break-up. In that case, India's growth would bounce back next year, Basu added.