The Indian economy can grow at rates of eight per cent or more over the next decade, Chief Economic Adviser to the Finance Ministry Arvind Subramanian said on Monday.
“We are already growing at over seven per cent. Growth of eight per cent or more is eminently doable, subject to the international environment being cooperative,” he said at the launch of the book India's Long Road: The Search for Prosperity .
The economy grew 7.6 per cent in 2015-16 and the Finance Ministry is eyeing eight per cent growth this fiscal on the back of a good monsoon.
However, Subramanian said the expectations of big bang or radical reforms in India are “historically unreasonable standard”, noting that a higher growth trajectory and reforms will be led more by the competitive federalism of States.
“The incentives of reforms are shaped in different ways...for a country like India that is not facing a crisis and is unwieldy with power widely dispersed,” he said.
Stressing that he is very “hopeful about India”, Subramanian said change is coming in the country through measures of the Centre but more importantly through the dynamism from decentralisation or competitive federalism.
“That will be the way forward for India,” he said, adding, “My standard is of persistent, encompassing and incremental reform.”
Exchange rate Subramanian said there is no control over the exchange rate due to opening up of the economy to inward capital flows over the last 15 years.
“We have progressively opened up to all kinds of capital flows,” he said in response to a query.