The country could be looking to return to a 9 per cent annual economic growth as early as April. Kaushik Basu, the government's Chief Economic Advisor, said on Monday that 2010-11 could be the year of a big rebound, suggesting that India had put behind last year's local downturn and the impact of a global meltdown faster than expected.
But double-digit growth would need a snipping of red tape and inefficiencies, he said, indicating room for more reforms ahead.
“The prognosis is very good and the growth rate should be 9 per cent towards the end of the next year,” Basu said at a function organised by the Federation of Indian Chambers of Commerce and Industry.
Basu said India, with its strong economic fundamentals that include high savings and investment rates, was likely to overtake China’s growth rate in the next four to five years. “Double digit growth is entirely within the cards. Crossing
over the growth rate of China in the next four to five years is not impossible,” he said.
However, he underlined that uneven income distribution and poverty continue to haunt the government and could spoil the party. To achieve a double-digit growth rate, the government would need to restructure itself by removing systemic inefficiencies, he said, adding that bureaucratic decision-making must be speeded up.
Basu said that the country’s savings rate that is over 35 per cent has contributed significantly in the recovery process apart from the stimulus packages rolled out by the government. The savings rate could rise to 40 per cent in the coming years and trigger sustained growth, he said.