Speaking at an industry interaction organised by Confederation of Indian Industry (CII) in Lucknow, the CEA also said that actual investments by the private sector are beginning to happen, which would result in job growth across rural and urban India in the coming years.
India can grow at a strong clip for a lengthy period without overheating, just like China did between 1979 and 2008, Chief Economic Adviser V Anantha Nageswaran said Friday.
He said India has “the potential to grow steadily between 6.5-7 per cent” between now and 2030 based on the reforms undertaken so far, without even assuming any further reforms, adding that additional reforms can then help push up growth even beyond to 7.5-8 per cent.
“In the last 30 years, whenever the Indian economy grew very strongly for 3-4 years, it used to run into problems: inflation will pick up, imports will go up, the currency will become very expensive, and then we have to take some drastic action. But this time, because of the sound economic policies we have followed, because of the infrastructure we have built in the last eight years, and because of digital transformation of the economy, it is possible now for the Indian economy to grow for a longer period — not just three years or five years, but seven or 10 or 15 years like China did between 1979 and 2008.”
“India can grow for a longer period without running into overheating problems because if you run machinery for a long period it tends to get overheated, that is the law of physics. But the speed with which we get overheated was a little too quick in the past but this time because of all the various good things we did in the last 8-9 years, we feel that the machine can run for 8-10 years without getting overheated. The economic machine. That is the hope we have at the moment for the economy,” he said.
Speaking at an industry interaction organised by Confederation of Indian Industry (CII) in Lucknow, the CEA also said that actual investments by the private sector are beginning to happen, which would result in job growth across rural and urban India in the coming years.
On India’s GDP growth, Nageswaran reiterated that the growth rate for 2022-23 will be revised upwards. “That is the momentum in the economy. That is what we are witnessing, that even 7.2 percent will turn out to be an underestimate and not an overestimate of growth last year,” he said.
With regard to Fiscal Responsibility and Budget Management (FRBM), Nageswaran said the overall goal of ensuring fiscal sustainability has not gone away even though the mechanism for doing so might vary depending on the compulsions of the time — and so, a 4.5 per cent gross fiscal deficit ratio is in place.