Indian economy on accelerated trend: Montek

The Indian economy continues to be on an accelerated trend with an upsurge in investments, low inflation rate and ample foreign exchange, Deputy Chairman of Planning Commission Montek Singh Ahluwalia said at United States India Business Council-CII event in Washington sponsored by the Tata Group.

He, however, added that the government was not satisfied with the present growth rate and seen in the context of China, there had been a rise in public expectations. "The bar has been raised," the economist told the gathering.

Ahluwalia maintained that there could be a gradual acceleration to a ten per cent growth rate over the next five years with the average growth being between eight and nine per cent.

"India can get to a ten per cent growth rate but the questions that are to be posed are over what period and the kind of policies that are needed to be put in place to achieve this objective. We are quite clear that this acceleration will not come from simply business as usual," he said.

During the interactive session, Ahluwalia made the point that while there had been "good" growth of the economy, the feeling in the country was that it had not been "sufficiently inclusive", like that for people involved in agriculture.

"The perception has been of a failure to put in place a set of policies that will generate good agricultural growth. That in turn is very much linked to modernising Indian agriculture," Ahluwalia said.

He said that if economic growth was to be inclusive, it had to factor in agriculture, including the critical issue of how to get the Indian farmer to diversify.

The deputy chairman also raised the issue of regional disparities, saying the reason for it was the lack of infrastructure.

"It is true that some states are doing very, very well, while others have not experienced the same benefits. One of the major reasons for this is lack of infrastructure."

He said the priorities of the government as it looked to the next generation reforms were in the areas of health and education with the public sector playing a major role and the development of infrastructure, including irrigation.

Referring to demands for better infrastructural facilities, the economist said major investments totaling around $200 billion was in the pipeline over the next five years in airports, roads, rail, irrigation.

The government was determined to create an environment that would bring in the private and the public sectors, he said.

Ahluwalia also pointed to India's need for energy to achieve high growth, referring to the civilian nuclear energy agreement between America and India.