Veteran economist Montek Singh Ahluwalia has played a crucial role in shaping the modern Indian economy and was a key part of the government’s liberalisation efforts from 1991. In an interview to Business Today, he spoke about the Indian economy and the West Asia crisis. He says the current account deficit (CAD) will be higher and GDP growth will be lower than current official forecasts and inflation will also be higher. But he warns that the balance of payments problem cannot be solved simply by cutting imports and relying on import substitution. “That can raise costs and make exports uncompetitive,” says Ahluwalia.