Reserve Bank Governor D Subbarao has said that six per cent growth would not get India anywhere in the global comity of nations.
“We must look to grow 10 per cent for another 15 years in order to raise our status from a low-income country to a medium-income one,” Subbarao said while delivering a lecture here on Monday.
The talk on “India in a globalising world: Some policy dilemmas” was the second in the series hosted by the Kerala planning board.
Subbarao said that governors of other central banks have spoken in glowing terms about the ‘creditable growth rate of six per cent-plus’ when even advanced economies were clocking much lower rates.
But the revealing difference lay in the huge difference in per capita incomes – this was as low as $1,500 for India against $50,000 or more for the advanced nations.
They had a high base and could afford to grow at those laid-back rates at least for the time-being.
ECONOMIC REFORMS
Subbarao said that the country would need to urgently embark on a path series of economic and governance reforms.
“Importantly, we must seek to pursue these reforms with zeal, passion and a sense of purpose so as to put ourselves back on the path of high growth witnessed during 2003 to 2008.”
Dwelling on the country’s massive current account deficit problem, he said the Reserve Bank was seriously reviewing the causative factors.
“One of these was the import bill of $65 billion run up by gold and silver into the country,” Rao said.
The Reserve Bank is still investigating the circumstances leading to the sudden spike in these figures, he added.