"The IMF estimates India's GDP growth potential to be some 8.5% per year; the authorities consider the post global crisis growth potential to be of some 8%. Achieving this in a context of a lesser reliance on public consumption and investment will imply boosting private investment, which, over the medium run will require a simplification of the business and regulatory environment, as well as facing the challenges of improving infrastructure to overcome the current shortcomings."
Does India agree with the conclusion contained in the latter part of this paragraph? If yes, how does India plan to boost private investment and to improve infrastructure?
Reply: The Indian economy was among the first economies to recover from the 2008 09 global economic and financial crisis. After recovering to a growth rate of 8.0% in 2009 10, it has registered a growth of 8.5% in 2010 11. Prior to the global crisis the Indian economy had averaged growth in real GDP close to 9.0%. The OECD's Second Economic Survey of India (June 2011) places India's growth potential close to 9%. Long run GDP growth would be around that and accordingly, the Twelfth Five Year Plan is likely to target 9% plus growth.
The Government is in the process of implementing several real and financial sector reforms and this will further improve the economic environment in the country. The regulatory architecture is being made more amenable for sustainable growth. The policy environment has been made more conducive for the spread of public private partnership in the infrastructure sector.
