"In many ways the coming decade will be crucial for India," he said. If India grows at 8 to 9 per cent per annum, it is estimated that per capita GDP will increase from the current level of USD 1,600 to USD 8,000-10,000 by 2025, said Rangarajan, also former Chairman of the Prime Minister's Economic Advisory Council.
"Then India will transit from being a low income to a middle income country. We need to overcome the low growth phase as quickly as possible, as growth is the answer to many of our socio-economic problems," he said.
Rangarajan was delivering the annual Khusro Memorial Lecture, which is held in memory of the late Professor Ali Mohammed Khusro, who was Member of the Planning Commission and Chairman of the 11th Finance Commission.
The former RBI Governor noted that in the recent period, a number of schemes aimed at broadening the base of growth had been launched, including the employment guarantee scheme, universalisation of education, expansion of rural health and providing food security.
"All these programmes have made a substantial demand on public expenditure. It has been possible to fund these programmes only because of the strong growth that we have seen in recent years. Growth has facilitated raising more resources by the Government," he said.
Noting that development has many dimensions, Rangarajan said it has to be inclusive, it must be poverty reducing and be environment-friendly.
"We need to incorporate all these elements in growth process." A strong and balance growth would enable the economy to achieve multiple goals, including reducing poverty, he said, adding, growth and equity should not be posed as opposing considerations.
"They must be weaved together to produce a coherent pattern of development. Therein lies economic statesmanship."
As far as the shortrun is concerned, speedy action on 'stalled' projects and energising public investment, particularly in the infrastructure sectors of roads, railways, power and coal will result in pushing up growth and boosting investor confidence, he said.