The RBI Governor, Mr Shaktikanta Das, recently made a statement that hasn't got the attention it deserved.
The Governor is quoted as saying:
India is at the threshold of a major structural shift in its growth trajectory, moving towards 8 per cent GDP growth in a sustained manner. We are moving towards an annual growth rate of 8 per cent.
This is by far the most optimistic official statement on the Indian economy in a long time. It is not clear what time frame the Governor has in mind for the growth rate of 8 per cent, whether it is a mediium-term forecast or a long-term forecast- the issue of the word "sustained" does suggest a fairly long time horizon.
The Chief Economic Advisor in the finance ministry has been talking of a sustained growth rate of 6.5 per cent. Many analysts have been talking of the potential for the Indian economy to grow at 8 per cent- provided various "big bang" reforms are carried out. What the RBI Governor is saying- if he has been quoted correctly in the media- is that, on present steam, the Indian economy is moving towards an 8 per cent trajectory.
Any thoughts on this, anybody?
1 comment:
The trendline growth assumptions have to be revisited is what Mr. neelkanth Mishra has been saying and often the first estimates often underpredict the true growth and we have often revised significantly.
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