Niti Aayog Vice-Chairman Rajiv Kumar has said that India needs more economic reforms, low interest rates and greater availability of funds to achieve its potential Gross domestic product (GDP) growth rate of over 8 percent. He indicated that the country’s economy grew by 7.1 percent in 2016-17 and 6.7 percent in 2017-18. He said “breaching the 8 percent growth ceiling is not easy, we have to try much harder and undertake the reforms at the level where it matters.”
Kumar has pointed out that the two major constraints being faced by the investors are less availability of finance and high interest rates. He observed that while the inflation is hovering around 4 percent, the marginal credit rate of banks is over 7 percent. He said “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.”
The vice-chairman also pointed out that the government needs to invest more in the country’s statistical system. He stressed that the allocations to statistical systems must increase many folds. Noting that invest climate and capacity utilisations are improving, he 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.