India should cut debt in 5-6 years: Montek

One of the objectives of fiscal policy was to stabilise the economy on how to react to "shocks" (whenever a slowdown occurs) both external and internal, he said.

Later talking to reporters, Ahluwalia said inflation was a problem but added 2014 would be a better year.

"Inflation is a problem. We will see a softening of inflation. If you look at the data, it suggests that there will be softening of inflation. I cannot judge how quickly it will often, but it will soften," he said.

On Tamil Nadu Chief Minister J Jayalalithaa's charge that the Centre was not allocating more funds to Tamil Nadu, he said, "I would not comment on state issues. She has not written to me on this matter."

On the Goods and Services Tax, he said "Most of the parties, I think, are coming closer. So, obviously it requires a Constitutional amendment. It will require going to the next Government (for passage)".

"I can assure you that if you are able to say that GST is now a reality, it will be the best signal globally that India is open for business and serious about it," he said.