Also, it is probable that the 7.2% GDP growth reported for fiscal 2023 could be revised upwards during data revisions, Nageswaran said, speaking at a Confederation of Indian Industry event in Lucknow. He said it would be possible for India to grow for a longer period of time, a decade or more, without running into “overheating problems” because of its sound economic policies, the infrastructure built in the last eight years and digitisation gains.
“Between now and 2030, based on what we have done so far without even assuming that further reforms will be done, I can say that we have the potential to grow steadily between 6.5% to 7.0%,” he said. “…if we add the additional reforms on skilling, factor market reforms among others, we can go up to 7.0-7.5% and possibly even 8%,” he added.
Maintaining economic growth while ensuring sustainability is important, and the government has increased investments on the ground, rather than revenue expenditure, the CEA said. This, he said, is the best way to develop the economy.
“In the last 30 years, whenever the Indian economy grew very strongly for three-four years, it used to run into problems. Inflation would pick up, imports would go up, the currency would become very expensive and then we had to take some drastic actions. But this time because of the sound economic policies we have followed, because of the infrastructure we have built in the last eight years and because of digital transformation of the economy, it is possible now for the Indian economy to grow for a longer period, not just three or five years but seven or 10 or 15 years the way China did between 1979 and 2008,” the CEA said.
On capex, he said the private sector is poised to attain stronger investment growth following the strengthening of corporate balance sheets, stronger bank balance sheets which has improved their ability to lend and support from the government’s capex push.Replying to a question on the need for universal social security, he said it may not be necessary for a growing economy like India. This is because the natural growth rate should provide opportunities for employment and income generation and such a programme may create ground for “perverse incentives” whereby people might not make effort to seek such opportunities, he said.