Prime Minister's Economic Advisory Council Chairman C Rangarajan said India has the potential to grow by 8-9 per cent going by the current rate of gross capital formation.
"With a gross capital formation of 30 per cent, India still has the potential to grow between eight to nine per cent annually," Mr Rangarajan said at the 39th foundation day of Coal India Ltd (CIL).
The former RBI Governor said the main problem for the Indian economy was the fall in the productivity of capital.
"Some critical inputs are not available and there is a delay in the implementation of projects," he said.
"The economy is not getting adequate output by investment of capital."
He said with speedy implementation of projects, the country could still grow at 8-9 per cent. He, however, said that as per the advanced CSO estimates, India would grow between 5 and 5.5 per cent in the current fiscal year (FY14).
Critical inputs were mainly coal and power, he said.
The current account deficit was likely to be lower than $70 billion this fiscal year, he added.
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