Prime Minister's Economic Advisory Council Chairman C Rangarajan today said India has the potential to grow by eight to nine per cent at the present rates of gross capital formation.
"With a gross capital formation of 30 per cent, India still has the potential to grow between eight to nine per cent annually," Rangarajan said at the 39th foundation day of Coal India Ltd (CIL).
The former RBI governor said that the main problem which the Indian economy was facing now was the fall in the productivity of capital.
"Some critical inputs are not available and there is a delay in the implementation of projects," Rangarajan said.
"The economy is not getting adequate output by investment of capital," he said.
Critical inputs were mainly coal and power, Rangarajan added.
He said with speedy implementation of projects, the country could still grow at between eight to nine per cent.
He, however, said that as per the advanced CSO estimates, India would grow between five and 5.5 per cent in the current fiscal.
The current account deficit (CAD) was likely to be lower than USD 70 billion this fiscal, he said.
