In next four years, India’s GDP can register a growth rate of whopping 9%, Niti Aayog vice-chairman Rajiv Kumar has said. In a Facebook live organised by NITI Aayog, not only did Rajiv Kumar exuded confidence that Indian economy will grow at 9% but also said that it will sustain the growth rate. “Given that we have done GST, demonetisation, IBC, recapitalisation of banks, we will grow at 9 percent growth by 2022. We will also able to sustain it at that level,” Rajiv Kumar was quoted by PTI as saying.
The Indian economy is indeed recovering from twin disruptions of the implementation of Goods and Services Tax (GST) and demonetisation and is expected to clock between 7.2% and 7.9% growth rate in next couple of years, all major predictions show. India’s GDP growth slumped to a low of 5.7% in the first quarter of the fiscal year 2017-18 due to the destocking ahead of the GST implementation.
While there is no doubt that India will clock a higher growth in coming years, a 9% growth rate seems a little too ambitious. The World Bank predicted only an 8.2% in 2022. Moreover, it said achieving 8% growth rate could be quite challenging as the historic trend show that even as India’s economic growth has been stable and resilient, this growth lasted only one to two years, and corrected sharply in the years after.
The World Bank, in its half-yearly India Development Report, pointed out that even as India is poised to benefit from structural changes such as the GST and the IBC law, more needs to be done to clock an 8% growth. India not only needs to strengthen the public sector but also create salaried jobs and manage natural resources to achieve the ambitious growth rate. It also said that until India registers a sustained growth rate of 8% for 30 years, India may not be able to gain the status of a middle-income country.