Ro­bust ex­ports, in­vest­ment must to achieve 8% growth: ADB

Financial Chronicle - - PLAN, POLICY - FC BU­REAU

IN­DIA can achieve over 8 per cent growth rate in a sus­tained man­ner if it takes steps to re­vive in­vest­ments and make ex­ports com­pet­i­tive, said ADB econ­o­mist Ab­hi­jit Sen Gupta.

Ef­forts will also have to be made to stream­line agri­cul­ture mar­ket­ing and im­prove sup­ply chain, he said, adding that this is the area where there is scope for more re­forms. “Right now, the in­vest­ment and ex­ports driv­ers are re­ally not fir­ing. Once those two en­gines fire up In­dia can sus­tain­ably grow at 8 per cent,” Sen Gupta said.

In its Asian De­vel­op­ment Out­look, 2018, the Asian De­vel­op­ment Bank ex­pects In­dia’s growth to pick up to 7.3 per cent in cur­rent fi­nan­cial year and ac­cel­er­ate fur­ther to 7.6 per cent in the next fi­nan­cial year.

Re­fer­ring to ex­ports, Sen Gupta said In­dia is still a “mar­ginal player” in global trade and there is a lot of po­ten­tial to in­crease ex­ports.

As Chi­nese ex­ports are be­com­ing ex­pen­sive be­cause of ris­ing wages, In­dia can reap ben­e­fits by im­prov­ing com­pet­i­tive­ness. “We need to im­prove our ‘ease of do­ing busi­ness’ and state of in­fra to ben­e­fit from trade and be bet­ter in­te­grated into the value chain,” Sen Gupta said.

On whether In­dia can achieve dou­ble-digit growth, he said: “it is not to­tally un­fea­si­ble. But, I don’t know if you can do that over a longer-term pe­riod given the state of in­fra­struc­ture and reg­u­la­tory poli­cies. Lot more re­forms would prob­a­bly be needed for that”.

Re­fer­ring to in­vest­ments, he said credit to in­fra­struc­ture and in­dus­try is pick­ing up, which is a pos­i­tive sign. “But clearly a lot more needs to be done if the in­vest­ment has to pick up,” he added.

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