Asian Development Bank Economist Abhijit Sen Gupta today said that India can achieve over 8 per cent growth rate if it takes steps to revive investments and make exports competitive. He also said that the efforts will also have to be made to streamline agriculture marketing and improve supply chain.
"Right now, the investment and exports drivers are really not firing... once those two engines fire up India can sustainably grow at 8 per cent," Sen Gupta told PTI. The statement comes a week after the ADB in a report pegged India's economic growth at 7.3 per cent in 2018 and to 7.6 per cent in 2019.
Sen Gupta believes that India is still a marginal player in global trade and there is a lot of potential to increase exports. As Chinese exports are becoming expensive because of rising wages, India can reap benefits by improving competitiveness, he said. According to him, India needs to improve Ease of Doing Business and state of infra to benefit from trade and be better integrated into the value chain.
On whether India can achieve double digit growth, the ADB economist said: "It is not totally unfeasible. But, I don't know if you can do that over a longer term period given the state of infrastructure and regulatory policies. Lot more reforms would probably be needed for that." Referring to investments, he said credit to infrastructure and industry is picking up, which is a positive sign. "But clearly a lot more needs to be done if the investment has to pick up," he added.
Elaborating on the reform scope in farm sector, Sen Gupta said the government could revamp the Agricultural Produce Market Committee (APMC) Act and streamline the farm supply chain for free movement of goods. "We have to see that the APMC act is more regulated and more state follow it," he said.
In March, Goldman Sachs downgraded India's GDP growth forecast from 8 per cent to 7.6 per cent for Financial Year 2018-19. It, however, retained growth forecast for FY 2019-20 at 8.3 per cent. Fitch Ratings and World Bank both have pegged India's GDP growth for FY 2018-19 at 7.3 per cent.
Recently, American economist and Nobel laureate Nouriel Roubini said that India needed more economic reforms to achieve its potential growth rate of 8-9 per cent. "My observation about India is that India has bright long term economic future... India should do more economic reform and more macro stabilisation to be able to increase its potential growth to well above 7 per cent and to 8-9 per cent," Roubini had said.