India's Growth Rate to Accelerate to 8-10% in 2-5 Years: Chief Economic Advisor

New Delhi: India is expected to accelerate to 8-10 per cent growth rate in two to five years on account of structure reforms and encouraging competitive federalism. "Basically, next 2-5 years, we will reach 8-10 per cent growth. There is no contradiction in saying that this year the world economy is weak and therefore we need to focus on domestic demand," Chief Economic Advisor Arvind Subramanian told reporters on Friday after Economic Survey 2015-16 was tabled by Finance Minister Arun Jaitley in Parliament. "In medium to long-term, we have to have exports as engine of growth that is necessary for us to attain 8-10 per cent growth," he said. Terming India as a bright spot, Mr Subramanian said there is case for pursuing structural reforms like implementation of Goods and Services Tax. Moreover, promoting competitive federalism will also push growth, he said, adding there are reasons to believe that good economics make good politics. However, there are some disappointments with regards to impediments in strategic disinvestment and twin balance sheet (TBS) problem. "One of the most critical short-term challenges confronting the Indian economy is the TBS problem - the impaired financial positions of the Public Sector Banks and some large corporate houses -- what we have hitherto characterised as the Balance Sheet Syndrome with Indian characteristics," he said. By now, it is clear that the TBS problem is the major impediment to private investment, and thereby to a full-fledged economic recovery, he said. With regard to GST, he expressed hope it will get through in the coming days. "I think the GST is a temporary set back we are very much hoping that it will be retrievable," he said. Asked whether there is a case for deviating deficit target for the next fiscal, Subramanian said, this is a call the government has to make keeping in view various factors... there are arguments both in pro and against this." "There are very good arguments for a strategy of aggressive fiscal consolidation, as earlier envisaged, and equally good arguments for a strategy of moderate consolidation that can place the debt on a sustainable path while avoiding imparting a major negative demand shock to a still-fragile recovery. The Union Budget will carefully assess these options," he said. However, there is a need to revisit medium-term fiscal framework, he said.

India's Growth Rate to Accelerate to 8-10% in 2-5 Years: Chief Economic Advisor

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