India in difficult times, says NIPFP professor

India is passing through difficult times and will continue to have low GDP growth, a professor with National Institute of Public Finance & Policy (NIPFP) said on Tuesday.

There is "no quick solution" and if the civil society and the political class "politely" argue with each other, then a solution will be found, he said.

"We are in difficult times and there is no quick solution to this. India will continue to have a period of low GDP growth", Ajay Shah of NIPFP, an autonomous research centre under the finance ministry, said here.

"What is going on in India is political churning. Rights and power of citizens have a great impact on the economy", he said.

Shah, who was also previously with the Centre for Monitoring Indian Economy (CMIE), said "If we the civil public and the political class politely argue with each other, then there will be solution".

Describing the period between 1991 to 2011 as the "golden age" of India's history, Shah said that the growth the country experienced then lifted 35 crore people out of poverty.

"Then trouble started with the steady decline in private investments. The private sector has lost heart", Shah said at a conversation on his book 'In Search of the Republic', co-authored with Vijay Kelkar, organised by ICC.

Shah said that there has been a ten per cent decline in private gross capital formation which is beyond the fiscal capacity of the state to balance it.

He also criticised the way the Insolvency and Bankrupcty Code (IBC) was implemented in the country.

"The government should have taken a longer time to introduce IBC. It is necessary to create infrastructure first," he said, adding that the implementation has resulted in large number of cases getting stuck creating a logjam.

"India has to be a prosperous market economy in liberal democracy with no state controls," Shah said.