Stable and effective govt to propel growth: economists

They say that the govt will have to take much bigger initiative in bringing $1 trn in the infra sector than what was thought earlier

Economists and investment bankers today said a stable and effective government post-elections would bolster economic growth, but differed whether growth would propel from the next year onwards. While investment banker Nimesh Kampani did not see growth expanding much next financial year from 4.9% in 2013-14, Surjit Bhalla of Oxus Investments pegged growth at over seven per cent next financial year.

"GDP growth would be 7% plus, industrial growth in the range of 5-6%. On the other hand, CPI would fall to 5-6%," Bhalla said.

He made his projections on the basis that inflation is on a downward trajectory. This would give a boost to growth, irrespective of whichever governemnt comes to power.

However, to sustain this growth, a government which is efficient is required. He did not agree with other speakers that the government has to be stable to deliver the results, but saiid it should be an efficient one.

He also projected that if the Bharatiya Janata Party gets 180 seats in the Lok Sabha it would not form the government, but if it gets 220 seats then it might form the government.

However, fromer RBI deputy governor Subir Gokarn said he did not see any fundamental difference in macro economic environment in 2014-15 than the current financial year, except for the Balance of Payments.

He said the government will have to take much bigger initiative in bringing $1 trillion in the infrastructure sector than what was thought earlier.

Kampani, chairman JM Financial Group, said despite deteriorating macro economic parameters, capital markets, which reflect collective wisdom of lots of people, are doing better. He said if stable government comes, India might see new era of growth.

He, however, projected growth to start recovering smartly only in 2015-16 at 6.5%.

India's economy is officially projected to grow 4.9% this financial year from a decade low of 4.5% in 2012-13.