India will be back on 7.5% plus growth track this fiscal: Virmani

India's economic growth seems to be back on a recovery path and the country will be on a firm 7.5 per cent plus growth track this fiscal, former chief economic advisor Arvind Virmani said today.

He further said the US-China tariff war provides an opportunity to increase India's exports to the US.

"Economic growth, which has been subject to many ups and downs over the past seven years, seems to be back on a recovery path.

"... Domestically, the main risk to macro stability is politically driven government consumption spending at the cost of investment and fiscal prudence. If this temptation is resisted, the country will be back on a firm 7.5 per cent plus growth track this year (fiscal)," Virmani told PTI in an interview.

He noted that the rise in oil prices due to geopolitical factors like sanctions on Iran by the US is, however, a concern.

Replying to a query on the US-China tariff war, the economist said it will have some short term disruptive effects on the global economy.

"The US-China tariff war, however, provides an opportunity to increase India's exports to the USA and to attract, labour intensive elements of the global supply chain unsettled by higher 'China risk' to India," Virmani observed.

Virmani, who was also India's executive director to IMF, predicted that the country will become a great economic power by 2035.

He said that historically every government pushes up what are referred to as populist expenditure in the year leading up to the election.

"The test is if they keep it modest and don't disturb the trend in fiscal responsibility.

"There is, therefore, always a risk of fiscal slippage," Virmani noted.

Recently, Niti Aayog Vice Chairman Rajiv Kumar also said that Indian economy is expected to grow by at least 7.5 per cent in 2018-19.