Basu sees India as industrialised nation by 2039

A high growth rate of 9% in future would ensure India's place among the industrialised nations within three decades, a senior finance ministry official said today.

"If we sustain 8.5-9% (economic growth), this would take India to the borderline industrialised nations group by 2039," Chief Economic Advisor Kaushik Basu said while addressing an event by the International Institute of Finance here.

The economy is projected to grow by 9% in next financial year.

Basu said it is possible for the country to achieve even a higher level of the growth rate.

"The long term view, our per capita growth expectation of 7% or over and GDP growth at 8.5% or more. I believe it is possible for us to do better."

 

Quoting from the UK-based 'The Economist', he said even that magazine, considered one of the foremost authorities of international economics has predicted a 9% growth for India next year, at par with China.

On inflation, which is hovering in the uncomfortable zone of over 8%, Basu said, "Inflation is a big concern."

Stressing the need for increasing investment in sectors like infrastructure, Basu said that following the bounce back from global economic recession and start of fiscal consolidation, the rate of investment in the country has been projected at 36.5%.

About borrowing, he said the private sector has a bigger role to play in it.

"The government borrowing has been restrained at Rs 3.4 lakh crore. Large part of the fiscal deficit next year is not to be funded by borrowing. There is considerably more scope for the private sector," Basu said.

As per the Budget for 2011-12 presented by Finance Minister Pranab Mukherjee, fiscal deficit is projected to come down to 4.6% next fiscal, from 5.1% in the current year.