8% GDP growth not sustainable yet; bond index inclusion may see short-term volatility: Abheek Barua

economictimes.indiatimes.com:

Abheek Barua, Chief Economist, HDFC Bank, says there is a laundry list of items that need to be addressed before we get on, and climb back onto that 8% to 9% sustainable growth path. We could have a one-off 8% or an 8.5% growth, but that is not what the steady state growth would be. I think the steady state would be closer to 7% to 7.5% in a good year.

There has been a very interesting comment made by the RBI Governor recently that India is at the cusp of a structural shift as far as the economy goes and we could be moving towards a sustainable 8% kind of GDP growth. Do you think that 8% growth is sustainable? And is it realistic? And what would it take to achieve that kind of sustainable growth?

Abheek Barua: I do not think so. I think to get to a sustainable growth path of 8% to 9%, we need to do quite a bit more. We have done a lot on the infrastructure side, but the last mile is yet to be covered so that we can plug into global supply chains. FDI flows have been very weak over the last year or so. It has been a global phenomenon, partly, but we have lost out a little more. So, we need to, work at the ease of doing business piece, which is so critical to attract investors.

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Then, we need to get private investment going. And much that the RBI governor would like to bring