Economic growth could rise to 10 pc in three years: Basu

Posted By: Pti
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New Delhi, Feb 25 (PTI) With the economy recoveringfaster than anticipated, Chief Economic Advisor Kaushik Basutoday said India''s economic growth rate could be in doubledigits in the next three years.

Referring to the impact of political turmoil in theMiddle East, he said the crisis would not hurt the economyunless the crude oil prices rise to "abnormally" high levels.

Inflation, however, would continue to be an area ofconcern, said Basu, the main author of the Economic Survey2010-11, which was tabled in Parliament by Finance MinisterPranab Mukherjee earlier in the day.

"In the next three years, it is possible (10 per centgrowth rate)," he told reporters when asked if India couldachieve an economic growth rate of 10 per cent.

The Survey said that economic growth will return to thepre-global crisis level of 9 per cent during 2011-12, from 8.6per cent in the current fiscal and 8 per cent a year ago.

Following the global financial meltdown, the growthrate slipped to 6.8 per cent in 2008-09 from over 9 per centin the preceding three years.

Basu sees no "serious worry" on the economy due toslowdown in FDI and excessive FIIs and expect them to becorrected soon.

"I right now see no real serious worry on the FIIs orFDI. One has slowed down one is very high.. I just hope thatthis will be corrected over the next month or next year," Basusaid.

He said that foreign direct investment (FDI) this yearhas been of some concern. However, "there are deals in theoffing which makes me feel that FDI we don''t have to reallyworry for too long it is going to pick up over the next year.

Basu added that FII flows have been very high this yearbut there was not substantial increase in exchange rate due tothe flow of hot money.

"In the beginning when this kind of flow was beginning tocome into India, I was actually a bit concerned that this isgoing to impact our exchange rate in a very big way," he said.

Portfolio investment, mainly FII inflows, has witnessedlarge net inflows of USD 23.8 billion during April-Septemberperiod 2010 compared to USD 17.9 billion in the year-agoperiod.

On the other hand, net FDI into India moderated to USD5.3 billion during April-September 2010 against USD 12.3billion in the corresponding period previous year.

Basu further said that wholesale price inflation islikely to reach 7 per cent by March end this year from 8.23per cent in January, adding that "7 per cent inflation inunacceptable." PTI BSP NKD CS

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