India can sustain 7% growth in coming years: S&P’s Louis Kuijs
NEW DELHI : India can sustain 7% growth annually in the coming years propelled by investments flowing into the country, high domestic savings, and by addressing supply-side challenges, Louis Kuijs, chief economist, Asia Pacific, at S&P Global Ratings, told Mint. If the government continues to work on resolving challenges related to infrastructure, institutional factors, labour laws, land acquisition rules, and education, the country can aspire to grow even faster, Kuijs said.
"It is important to work on those supply side areas if you want to achieve something like 8% growth," he added. As things stand, India remains the fastest-growing major economy amid a slowdown in global growth, especially among advanced nations, affecting global trade.
The statistics ministry, in its second advance estimate released in late February, has pegged India’s economy to expand at 7.6% in FY24 amid strong investment growth in plant and machinery, robust manufacturing growth, and a slight improvement in trade. India, due to its huge population, has a large domestic market that local manufacturers can leverage, Kuijs said.
"If Indian industry can produce most of the goods that its middle class is looking for, it would help a lot in keeping growth more sustainable compared to the scenario where India has to completely rely on other economies (as a market for its manufactured goods)," he said. " However, there is still quite a bit of homework to do in India with increasing the role of the manufacturing sector and making sure that it can compete in global markets and also against imports in its domestic market without the need to raise import tariffs," he added.
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