New Delhi, Mar 29 (KNN) India has the potential to sustain an ambitious 8 per cent economic growth rate until 2047, provided the country redoubles its proven policies of the last decade and accelerates reforms, according to Krishnamurthy Venkata Subramanian, India's Executive Director at the International Monetary Fund (IMF).

While acknowledging that an 8 per cent growth target is ambitious, given India's past growth trajectory, Subramanian expressed confidence in its achievability.

He outlined the broad strategy at the Times Now Summit on Thursday, stating, "If we can redouble the good policies implemented over the last 10 years and accelerate reforms, then India can grow at 8 per cent from here on till 2047."

Subramanian's optimism draws strength from India's recent economic performance. The country's GDP grew by an impressive 8.4 per cent in the final quarter of 2023, marking the fastest pace in the last one-and-a-half years. This robust growth helped push the overall economic expansion for the current fiscal year to 7.6 per cent.

The IMF official highlighted that sustaining 8 per cent growth could propel India to become a USD 55 trillion economy by 2047. Historically, since 1991, India's average growth rate has hovered slightly above 7 per cent.

Strengthening domestic consumption, which accounts for 58 per cent of India's GDP, emerges as a crucial priority. "We have the potential for much higher consumption if we can create enough jobs," Subramanian emphasised, underscoring the need for job creation.

To unlock this growth potential, the IMF official stressed the importance of encouraging the manufacturing sector as a key driver of employment generation. However, he cautioned that reforms are necessary across multiple fronts, including land, labour, capital, and logistics sectors.

Subramanian specifically emphasised the need for reforms in the banking sector to facilitate credit flow to the manufacturing industry.

"Reforms are required in the manufacturing sector, but at the same time, we also need reforms in our banking sector to provide credit for the manufacturing sector," he noted.

(KNN Bureau)