India’s economy has entered into a new phase of high growth and would grow by 9 per cent in the next financial year ( 2008-09) buoyed by investment and savings amidst increasing productive capacity, the United Nations Economic and Social Commission and the Pacific (UN-Escap) said on Thursday.
In its Economic and Social Survey for Asia Pacific 2008, Escap said the sustained expansion of the Indian economy would seek growth at between 8.5 per cent and 9.5 per cent over the medium term.
This could bring some to cheer to India’s policy makers after independent think-tanks have projected a slowing down of the country’s growth in the coming year.
After growing at a blistering pace of 9.6 per cent in 2006-07, GDP is estimated to grow at a slower pace in 2007-08.
Escap, however, cautioned that prices remained a down-side risk. “There are also concerns over sustaining the high level of growth and as well as creating inflationary instabilities,” it said.
Under Secretary General of the UN and Executive Secretary of the Escap Noeleen Heyzer said that rising food prices would be a major challenge in 2008 and pressure on inflation from rising food prices will continue during the year. “India could achieve and sustain a 10 per cent growth rate by further improving the country's business environment, by developing its physical infrastructure and human capital,” the survey said.
Commerce and Industry Minister Kamal Nath, who released the survey, said that the Asia-Pacific region is acting as locomotive for world economic growth. “It is imperative for all of us to be geared towards sharing the economic pie more equitably both within countries and between them,” he said.
The survey also suggested that Indian government should continue efforts to "contain wasteful spending and orient it towards priority sector" for promoting economic growth.
It also warned that public debt continues to remain a "serious problem".