Despite some sectors showing weaknesses in terms of growth, the overall situation still remains buoyant and the country should be able to achieve a growth rate between 8.5% and 9% during this year, C Rangarajan, chairman, Economic Advisory Council to the Prime Minister, said.While maintaining that the prospect of achieving 9% growth in a sustained way was within our grasp, he, however, listed out six challenges. These include agriculture, infrastructure and good governance that have to be addressed to achieve the target comfortably.Speaking on 'Indian Economy: Challenges and Opportunities' at the TiE-ISB Connect 2007, an annual event providing a mutual platform for entrepreneurs with new ideas and venture capitalists, at the Indian School of Business, Rangarajan said consumption and investment had played more or less an equal role in driving growth in the last four years, beginning 2003-04."In terms of sustaining the high growth over the medium term, some of the macro economic parameters are in the right direction. The domestic saving rate of the economy had touched 32.4% of the GDP in 2005-06. The gross investment rate was 33.8%. In fact, the Eleventh Plan projection for the gross domestic saving rate was 32.3%. This has already been achieved. Therefore, in terms of saving and investment rates, the conditions for achieving a growth rate of 9% are already there," he pointed out.A higher growth in agriculture from improved productivity, better infrastructure, more particularly in the power sector, and good governance as an essential tool for ensuring that all citizens get the full benefits of various policy interventions are important to sustain the growth in the coming years, he said.Among the other three challenges, managing globalisation in such a way so as to maximise the benefits and minimise the costs from it forms an important task even though the country is in a position to rest the significant gains from globalisation. Besides, efforts to modify international trading arrangements to take care of the special needs of developing countries are on, according to him. The last two include fiscal consolidation, especially containing revenue expenditure, and spending more on building social infrastructure like health and education.He had a piece of advice for industry in this hunt for higher growth as well. While stating that the industry had a right to demand that macro economic policy environment should be conducive to the rapid economic growth, Rangarajan, however, said it was time for industrial units to recognise that the challenges of the new century demand greater action at the enterprise level. "In today's environment, the primary focus has to be on the strategy and quality of micro-economic business management and the goal must be to achieve higher levels of efficiency and productivity," he said.
