India's projected GDP growth of over 7 per cent for the current fiscal is "amazingly fast" and if this momentum is maintained the size of the economy can double within a decade, ADB Chief Economist Yasuyuki Sawada has said.
The country shouldn't worry about not achieving 8 per cent growth but focus on increasing domestic demand by reducing the income inequality, he said. Growth is driven more by domestic consumption than exports, he added.
The Asian Development Bank (ADB) has projected India to remain the fastest growing Asian nation with 7.3 per cent growth in 2018-19, and 7.6 per cent in 2019-20.
The Indian economy is forecast to grow at 6.6 per cent in the 2017-18 fiscal ended March 31, slower than 7.1 per cent in 2016-17.
"7 per cent growth is amazingly fast. If a 7 per cent growth continues for 10 years, then that economy's size doubles," Sawada said in an interview with PTI.
"So that's super fast growing growth rate. And being one of the largest economies in the region, achieving this 7.3 per cent this fiscal and next year, 7.6 per cent, is really amazing," he added.
The size of India's economy is about USD 2.5 trillion currently, making it the sixth largest in the world. Economic Affairs Secretary Subhash Chandra Garg had said recently that the country is on track to doubling the size of its economy to USD 5 trillion by 2025.
Sawada said however that clocking 8 per cent growth is a "big challenge" for India as of now. "7 per cent growth is a very good number and India should not worry about not achieving 8 per cent growth."
Asked whether export revival would be important for driving the economic growth, he said that half of India's growth is driven by private consumption followed by investment and hence domestic market seems to play a major role in growth.
"Export is not a necessary reading for India growth. Rather domestic market seems to be very important...to support growth rate. Of course, export is one part of growth driver, but Indian growth is driven more by domestic market," he said.
Sawada said inequality and poverty reduction would play a "very important role" in achieving higher growth because consumption can stimulate more production and that can absorb more employment. He said that poor people, if their livelihood goes up, can be good consumers.
"Tapping the broadening market will be important to achieve higher growth," he said, adding that the services sector too would play a role in pushing up economic growth.