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Govt confident of higher growth; concerned over state finances

India on Monday expressed confidence in attaining the desired 8.0 per cent growth annually during the next five years but expressed concern over the worsening of fiscal situation states.

"Do not bet on the basis of last year's growth rate or even the growth rate during the last 10 years. The aggregate GDP shows a rising trend," additional secretary to Prime Minister, Prodipto Ghosh, said at World Economic Forum in New Delhi.

He said the economy, which was growing by 3.0 per cent during the 1950s, posted 6.0 per cent growth during the last decade and the trend shows an upward direction in the coming years as well. Last fiscal GDP grew by 5.4 per cent.

"We cannot conclude that growth acceleration phase has run out of steam. The services sector has been growing by over 10 per cent during the last two decades and this fact alone will accelerate the rate of GDP growth," Ghosh said.

He said demography would play an important role in India's growth rate. The dependency ratio has shown a decline in the last two decades, which means that savings rate was slated to go up and push up GDP growth.

Finance secretary S Narayan said India's fundamentals were robust due to good macro-economic management. "India's is not like any other developing economy. It has the potential and it will grow," he said.

Although the fiscal deficit of the centre was static at about 5.3 per cent in the last 2-3 years, he said the forex reserves has increased to $66 billion.

He, however, expressed concern over the fiscal deficit situation of states and said, "some states have taken it seriously but others have not."

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