Confident of growing at 7-8 per cent rate in next 5 years: Montek

Planning Commission Deputy Chairman Montek Singh Ahluwalia on Monday said given the past track record , India will grow at 7-8 per cent rate in the next four to five years.

Ahluwalia's comments come in the backdrop of the latest Central Statistical Organisation's estimates showing that the economy will grow at a rate of 5 per cent in the current financial year - the lowest in over a decade.

"It will be reasonable to assume that the growth rate would be 7 to 8 per cent, which I would call passing grade. I am reasonably confident that over this four-five year period, that is going to be growth rate of Indian economy," he said addressing a panel discussion in the national capital.

Some analysts are of the view that the annual average economic growth rate in the 12th Plan (2012-17) would be 6.6 per cent against the targeted 8 per cent in the five-year policy document.

However, a section has expressed concerns over slow recovery in the domestic manufacturing sector, which is expected to hit the overall economy this fiscal.

Ahulwalia said: "If you take the 10-year period, the average (economic) growth comes out to be 7.5 per cent and if you use the statistical method, it still comes out to be 7.4 per cent. So, the conservative estimates based on the past ten years, indicated that Indian economy has demonstrated a capacity to grow at 7.4 per cent".

Referring to the problem of widening Current Account Deficit (CAD), the Planning Commission Deputy Chairman said: "This is a serious problem...we need to survive with CAD of over 4 per cent in next two years" and efforts were needed to contain it.

CAD - representing the difference between exports and imports after considering cash remittances and payments - had risen to $38.7 billion or 4.6 per cent of the GDP (gross domestic product) during the first half of the current financial year. Of this, a major contribution was by way of gold imports, amounting to $20.25 billion.

with inputs from PTI