India could revert to 8.5-9% growth in two years: Kaushik Basu

"...Yes its a difficult period, but two years later India should be back again what it was attempting to be, which is 8.5-9.0 per cent growth. I really feel that this is possible," he told PTI here.

Basu, former Chief Economic Advisor in the Finance Ministry, is here in connection with a conference on youth employment being organised by the World Bank.

For the current fiscal, Basu said a growth rate of 5.5-6 per cent should be good enough taking into account various global and domestic factors.

"...If you have to look in a global space, the slowdown is occurring absolutely across the world.... India remains between 5.5 and 6, which I don't think is an unrealistic figure given by the Finance Minister," he said.

Finance Minister P Chidambaram had recently in an interview in Mexico City said: "I'm looking forward to this year ending with 5.5 to 6 per cent growth, barring any unexpected shocks, and next year getting back to 7 per cent growth, and in 2014-15 getting back to 8 per cent growth."

India's growth rate in 2011-12 had slipped to a nine-year low of 6.5 per cent.

Referring to India's fiscal problems, Basu said given the global scenario, the situation was not that bad for the country. "I just like to believe that India is serious enough...Government's top across politicians together are mature enough that they realise that the path of fiscal consolidation is extremely important."

The fiscal deficit in the current year, according to Finance Ministry's estimates is likely to be 5.3 per cent of the Gross Domestic Product (GDP), up from 5.1 per cent estimated in the budget for 2012-13.

Some experts, including credit rating agencies, however, feel fiscal deficit could even be as high as 6.1 per cent in view of rising gap between revenue and expenditure.