New Delhi: India can achieve a growth rate of 7.4% in the current fiscal if measures in addition to stimulus packages are taken, the Planning Commission has said in a report, even as other international agencies have lowered the rate of fiscal expansion for the country.
“If a major effort (in addition to stimulus packages) to further increase public investment in construction can be mounted, we can have a higher growth rate... A Rs50,000 crore absorption, i.e. 1% of GDP can, raise the growth rate by up to 2.2 percentage point,” a Planning Commission report submitted to the Prime Minister Manmohan Singh said.
Stating if even half of this figure is realised, growth rate for 2009-10 could be 7.4%, it added, “modelled as an increase in construction demand by the government financed through foreign inflows or reserve depletion, it gives a big boost to (gross domestic product) GDP as it increases employment.”
The economy, otherwise, is likely to expand by 6.3% in the current fiscal, aided by stimulus packages and UPA’s flagship programme National Rural Employment Guarantee Scheme (NREGS), the report said.
Under the present circumstances, it stated, “These (stimulus measures by the government) can raise the growth rate by 1.6 percentage points to 6.3%.”