GDS to rise to 32% in 3-5 yrs, says Mohan

India's gross domestic savings (GDS) rate is expected to increase to around 32 per cent in the next three-five years vis-a-vis about 28 per cent now, according to Rakesh Mohan, deputy governor, the Reserve Bank of India.

Mohan was speaking at a joint conference on 'Indian economic sector reforms' held by the Centre for Analytical Finance, Indian School of Business and Stanford Centre for International Development (Stanford University), in Hyderabad today.

"India is on the move, and although there was a downturn from 1997 to 2002, there has been a resurgence of the economy thereafter because of industrial restructuring," Mohan said.

"While the banking system in the last 25 years collapsed in 100 countries, India did not face such a crisis. Private sector savings have been continuously rising and there is a need for an increase in household savings too. We expect that in the next 3-5 years, the GDS rate will increase to around 32 per cent from 28 per cent now," he added.

Holding a contradictory viewpoint, T N Srinivasan, senior fellow, Stanford Centre for International Development, said there is a hiatus in the Indian economic reforms process. "The reform process has stalled. We have to move away from protectionism and need to open up the economy further to external competition. We need to attract larger inflows of foreign direct investment even in the manufacturing sector," he added.

S Narayan, former economic adviser to the prime minister, said the only concern with reference to the Indian economic sector reforms was that while there were policies made, there was delay in implementation.

"For instance, privatisation of the Delhi and the Mumbai airports has not yet been taken up and the fast-freight corridor in railways has seen no progress though it received in-principle approval eight months ago," he added.