Indian economy can still grow 8% this fiscal: Arvind Panagariya

On the rural economy, he said that continuous action is needed particularly on the agricultural front

Expecting an upward revision of the first quarter GDP numbers, NITI Aayog Vice Chairman Arvind Panagariya today said the Indian economy can still manage 8% growth rate this fiscal.

"I have consistently maintained that economy is moving forward and we have seen the growth shift up to 7.4% (in second quarter) now," Panagariya replied when asked if GDP will touch 8% mark as projected by him earlier.

He further said, "I still remain optimistic perhaps we will see somewhat revision in the first quarter figure also. So my prediction remains that by the time we get to the fourth quarter we would get to about 8%."

Panagariya's comments on the national accounts have come after the Finance Ministry in a statement said earlier this week the economy will grow in the vicinity of 7.5%.

However, the government had earlier projected a growth rate of 8.1-8.5% for the current fiscal.

According the Central Statistics Office data released earlier this week, the Indian economy showed signs of recovery and grew at 7.4% in July-September quarter this fiscal mainly on account of higher manufacturing growth of 9.3% in the three-month period.

The economy had grown at 7% in the April-June quarter. During the first half of this fiscal GDP grew 7.2% compared to 7.5% in same period of 2014-15.

On the rural economy, he said, "... We need to continue to take action particularly on the agricultural front. We would shortly come out with the paper which would be work of the taskforce on agriculture development."

Explaining further, he said, "Farmers must receive remunerative prices. This connects with issue of crop support prices and APMC (Mandi) reforms. The prices received by the farmers tend to be a smaller portion of what a consumer pays. There are also issues on the technology front."

On setting up Atal Innovation Mission as envisaged by the government, he said, "We have a process underway to set up a mission secretariat. We would also set up a high-level committee which will guide work of the secretariat."

Earlier, Panagariya expressed disappointment over meagre expenditure on research and development, saying just one% of the GDP has been spent for the last many years.
Finance Minister Arun Jaitley in Budget 2015-16 had

announced the government's plan to establish the Atal Innovation Mission (AIM) and said that initially a sum of Rs 150 crore will be earmarked for this purpose.

The AIM will promote innovations in the country. Following the Budget announcements, NITI Aayog had constituted an Expert Committee under the Chairmanship of Professor Tarun Khanna, Director, South Asia Institute, Harvard University, USA.

The panel has submitted its report. It has made wide ranging recommendations for short-term (where action can be taken relatively quickly to deliver almost immediate payoffs), medium-term (that can be addressed within a 5-7 year time frame) and long-term, which are likely to have long gestation periods, but will lead to a profound transformation in the entrepreneurial fabric of the country.

The Committee observed that formulation of the AIM could be a defining moment in India's economic history, and the idea must be unfettered and allowed to flourish.

The Committee also emphasised the need to establish clear systems to monitor implementation, execution and impact. It has also been asked to incentivise corporates for their investments in research and development.

A cash prize of up to Rs 30 crore for innovative entrepreneurs and setting aside 1% of corporate profits to encourage out-of-the-box thinking are some of the proposals suggested by this panel.