India needs more reforms to grow over 8%: Rajiv Kumar

More reforms, low interest rates and greater availability of funds are needed to push India's economy to higher growth trajectory of over 8 per cent, Niti Aayog Vice-Chairman Rajiv Kumar said Thursday.

India grew by 7.1 per cent in 2016-17 and 6.7 per cent in 2017-18.

"Breaching the 8 per cent growth ceiling is not easy, we have to try much harder and undertake the reforms at the level where it matters," he said at an event organised by Pahle India Foundation.

Kumar said that the two major constraints being faced by the investors are less availability of finance and high interest rates.

 

He observed that while the infaltion is hovering around 4 per cent, the marginal credit rate of banks is over 7 per cent.

"The cost of capital can not be equal to rate of returns, it (rate of returns) must be higher than cost of capital in the long run. So, this is where I think we need to have a very good look.

"...Otherwise, I am afraid despite the promise, growth rates may not be sustained," Kumar noted.

He also expressed displeasure at politicisation of release of back-series GDP data Wednesday at a joint press conference addressed by him and Chief Statistician Pravin Srivastava.

Kumar said that the former Finance Minister P Chidambaram has done great disfavour to officers of CSO by criticising back-series GDP data released by the Central Statistics Office (CSO).

"I am deeply pained at people who politicised it for no reason at all," he said.

The vice-chairman also pointed out that the government needs to invest more in the country's statistical system.

"The allocations to our statistical systems must increase many folds," he stressed.

Noting that invest climate and capacity utilisations are improving, Kumar said, "Domestic investments is going to drive the Indian economy".

He also stressed on need of improving competitiveness of India's production units by the government and industry working together.

"We have not done enough to modernise our agriculture," he noted.

Niti Aayog vice-chairman also announced that he is trying to put indicators of leading economic parameters, which will be more sophisticated than what India has so far.