Given the past track record, the Indian economy will grow in the range of 7-8 per cent in the next four to five years, Planning Commission deputy chairman Montek Singh Ahluwalia said on Monday.
"It will be reasonable to assume that the growth rate would be 7 to 8 per cent, which I would call passing grade. I am reasonably confident that over this four-five year period, that is going to be growth rate of Indian economy", Mr Ahluwalia said addressing a panel discussion.
According to latest estimates by the Central Statistical Office, in the current fiscal year the economy will grow at a rate of 5 per cent, which is the lowest in over a decade.
Some analysts are of the view that the annual average economic growth rate in the 12th Plan (2012-17) would be 6.6 per cent against the targeted 8 per cent in the five-year policy document.
However, a section of economists have expressed concerns over slow recovery in the domestic manufacturing sector, which is expected to hit the overall economy this fiscal year.
Mr Ahulwalia said, "If you take the 10-year period, the average (economic) growth comes out to be 7.5 per cent and if you use the statistical method, it still comes out to be 7.4 per cent. So, the conservative estimates based on the past ten years, indicated that Indian economy has demonstrated a capacity to grow at 7.4 per cent."
Referring to the problem of widening current account deficit (CAD), Mr Ahluwalia said, "This is a serious problem...we need to survive with CAD of over 4 per cent in next two years."
India's current account deficit- representing the difference between exports and imports after considering cash remittances and payments - had risen to 4.6 per cent of the GDP (gross domestic product) during the first half of the current fiscal year.
Of this, a major contribution was by way of gold imports, amounting to $20.25 billion.
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