Growth could propel India to industrialized nation status

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A high growth rate of 9 per cent in future would ensure Indias place among the industrialised nations within three decades, a senior finance ministry official said on Wednesday. “If we sustain 8.5- 9 per cent (economic growth), this would take India to the borderline industrialised nations group by 2039,” Chief Economic Advisor Kaushik Basu said while addressing an event by the International Institute of Finance in New Delhi.

The economy is projected to grow by 9 per cent in next financial year. Basu said it is possible for the country to achieve even a higher level of the growth rate. “The long term view … our per capita growth expectation of 7 per cent or over and GDP growth at 8.5 per cent or more … I believe it is possible for us to do better.”

Quoting from the UK-based The Economist, he said even that magazine, considered one of the foremost authorities of international economics has predicted a 9 per cent growth for India next year, at par with China. On inflation, which is hovering in the uncomfortable zone of over 8 per cent, Basu said, “Inflation is a big concern.”

Stressing the need for increasing investment in sectors like infrastructure, Basu said that following the bounce back from global economic recession and start of fiscal consolidation, the rate of investment in the country has been projected at 36.5 per cent.

About borrowing, he said the private sector has a bigger role to play in it. “Government borrowing has been restrained at Rs. 3.4 lakh crore. Large part of the fiscal deficit next year is not to be funded by borrowing. There is considerably more scope for the private sector,” Basu said.

As per the Budget for the next year presented by Finance Minister Pranab Mukherjee, fiscal deficit is projected to come down to 4.6 per cent next fiscal, from 5.1 per cent in the current year.