GDP growth may not be 10 percent: survey

By agencies   |   Thursday, 10 February 2005, 20:30 IST
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NEW DELHI: Without sweeping reforms in the budget and reining in fiscal deficits, India will not be able to achieve 10 percent growth, a Moody’s survey says. Moody's Vice President Kristin Lindow said rapid industrial growth and development would not be possible unless the fiscal situation is stabilized and more financial resources are freed up for social and physical infrastructure. ‘’The promise of comprehensive tax reforms is therefore very encouraging; we think this would be a very positive step in the right direction. So too is the emphasis on infrastructure development, but we would hope that this would come without sacrificing the goals of FRBM, which has still to establish its credibility," she said. The Confederation of Indian Industry wants the government to convert revenue deficit to surplus and hike in investment for an appropriate level of growth. It said the surplus revenue will add to the domestic savings pool and keep the cost of capital at internationally competitive levels. "For a zero revenue deficit target, measures have to be taken to widen both the direct and indirect tax base, privatise loss-making PSUs and rationalize government expenditure," the CII said. FICCI said that to attain growth rates close to 10 percent, the investment rates in the economy should go up to 33 percent.