"We should be aiming at 8 per cent (growth) next year and from then onward, we can build on to a more rapid growth.
"Most important thing is this regard, in my view, would be a Budget that signals a return to fiscal consolidation," Ahluwalia said in an interview with Karan Thapar on CNBC TV-18.
"The government's objective in the Budget should be to recover the momentum of growth," he said, adding that the Union Budget, to be presented in mid-March, will be a very important and critical signal.
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The government last month revised the growth forecast for the current fiscal downward to 7.5 per cent on domestic concerns like high inflation and slowing industrial output, besides a global slowdown.
The Indian economy had expanded by 8.5 per cent in 2010-11.
During the first half this fiscal, economic growth stood at 7.3 per cent.
In the second quarter (July-September) of 2011-12, growth slipped to a two-year low of 6.9 per cent.
"How much we can do to uncork the bottlenecks in infrastructure depends on the confidence that the Budget can bring in. But I think it would be reasonable for us to try to try to take the economy back to 8 per cent (growth)," Ahluwalia said.
Ahluwalia said the aim in the near-term should be to create conditions for greater investment by both the private and public sector.
"Public sector undertakings have a lot of cash and they should be investing in energy or infrastructure. I think those are the things we should be focusing (on). . .," he said.
According to Ahluwalia, it would be possible to signal international investors that India's growth fell to around 7 per cent, but is on the way up again.
"There would not be too many countries doing that, other than China," the Plan panel deputy chief said.
He pegged growth in the current fiscal at around 7 per cent.
"I think we are going to end the year with around 7 per cent growth.
"We are going to end the year without the panic about inflation. . . . That's a good time to look at what the next year is going to look like," Ahluwalia said.
He said in a time when sovereign ratings of many euro zone countries have been downgraded and global uncertainty, markets in India and abroad are looking to see which countries are positioning themselves well.
"In my view, India is in a position where we could give signals that position us well," he said.
Asked about the fiscal deficit target of 4.6 per cent of the GDP in 2011-12, Ahluwalia said: "I do not want to go beyond what the Finance Minister has said. . . I think what the Finance Minister has said is that it (fiscal deficit) is going to be worse, but he is working on the fiscal consolidation programme and you just have to wait till the Budget to know what that is."
Finance Minister Pranab Mukherjee has already said meeting the 4.6 per cent fiscal deficit target is going to be difficult in view of the economic slowdown and less-than-expected revenue collection.
"I do not think 7 per cent or 6.5 per cent (fiscal deficit) is remotely possible... I can easily argue that a deterioration in fiscal deficit on the order of maybe one percentage point to GDP from 4.6 per cent to 5.6 per cent could be little bit higher.
"This is not something that is new," Ahluwalia said.
According to him, markets are aware of the likelihood of slippage against this year's fiscal deficit target.
"Markets anticipated it and everything that you are seeing reflects the fact that the fiscal deficit has slipped up. . . Fiscal deficits basically increase because of less revenue than you expect," he said.
Image: Montek Singh Ahluwalia