The Reserve Bank of India does not expect the economic growth to have a spectacular turnaround next fiscal, according to its Deputy Governor, Dr K.C. Chakrabarty. He expects the GDP growth to be around seven per cent this fiscal.
“The growth rate this year will be around seven per cent,” he told reporters on the sidelines of an interactive session at a city college on Wednesday. There is no “big difference between 6.9 per cent and 7.1 per cent or below seven per cent,” he said, adding that the country is aspiring for 8.5 per cent to 10 per cent growth.
“It has definitely slowed down. Next year also we don't expect a spectacular turnaround… at least that is not seen if we continue to work the way we are working,” said Dr Chakrabarty.
However, he added that a 6.9 per cent growth was a good growth. Compared to global economic growth standards, “6.9 per cent to seven per cent appears reasonable,” he said.
The services side has been the growth driver now, he said, adding that no country has become strong without going through manufacturing growth. The focus should be to shift surplus labour from agriculture sector to manufacturing sector.
The country also needs to work hard towards increasing the per capita income levels from its current $1,200.
“We need to grow by 9-10 per cent for the next 20 years if we need to become a middle-income country,” said Dr Chakrabarty. Such a growth was not possible, “if we can't bring down inflation levels below five per cent,” he added.
He also pointed out that the country's current account deficit has to be brought down, and “we have to find ways to use gold more efficiently”. He urged commercial banks to monetise gold in the country.
According to him, the growth process in the country was not inclusive. “Inclusive growth is an objective of our national plan,” said Dr Chakrabarty.