India could grow at about 7% annually this decade: CEA Anantha Nageswaran

NEW DELHI (Reuters) -India should be able to grow at about 7% annually this decade as investment spending is expected to rise and the digital economy picks up, the chief economic adviser said on Tuesday.

The government has already said it expects the world’s fifth-largest economy to grow at more than 7% this fiscal year, after it expanded by 13.5% in the April-to-June quarter, the fastest pace in a year.

Economists, however, say growth is likely to lose momentum in the coming quarters as higher interest rates cool economic activity.

“While international agencies are showing our trend growth at 6%, I feel the trend growth will easily be 7% per annum for the remainder of this decade and beyond,” said Chief Economic Adviser V. Anantha Nageshwaran at an event in New Delhi.

“I am taking 6% as the very easily attainable growth rate and I am adding 0.5% coming from the capex (capital expenditure) pool and another 0.5% will come from the digital public infrastructure that we have created.”

Nageshwaran said that “investment spending which we had experienced back in 2006 to 2012, is going to come back and that is going to be one major driver (for growth)”.

The rupee’s depreciation of more than 7% against the dollar this year has pushed up the cost of imported items for consumers and businesses, but Nageshwaran said the country was not defending the currency.

“I don’t think Indian fundamentals are such that we need to defend the rupee. The rupee can take care of itself,” he said.

(Reporting by Shivam Patel and Krishna N. Das; Editing by Clarence Fernandez and Ana Nicolaci da Costa)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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