Even as India's factory output figures grew at 2.4% in January, Raghuram Rajan, the chief economic adviser to the government, seemed inclined towards a wait and watch approach before stating cautiously that the country appeared to be on the path to recovery.
"It is too early to say with certainty that we are firmly in the recovery mode as there could again be some sudden volatility though I would underline that the signals suggest that we are turning around," said Rajan on Thursday.
While underlining that uncertainty still prevailed in certain areas, the chief economic adviser said that there was an immediate need to make the investment environment more hospitable.
"The government alone cannot bring recovery, it has to be a collective effort. The government, public and private sectors together must work to ensure that economic growth is back on track and is sustainable," he said.
Rajan said that increase of foreign and domestic investment was critical at this point to help in financing the yawning current account deficit besides improving the economic environment to boost exports.
"We must remove the roadblocks to increase exports and we may see some positive measures in the foreign trade policy" Rajan said.
"The good news is that there has been some stabilisation in the last two months and we are witnessing some stabilisation in the world economy," Rajan added.
For the economy to be back on the growth track, savings needed to be boosted, he concluded.