New Delhi: Independent India’s economic journey, which began with a modest Hindu rate of growth of 2-3% 60 years ago to the current near double digit figures, could have been better, feel economists.
“India’s economic performance was good, but could have been better in the last 60 years. A solid foundation has been laid for future growth though,” said economic think tank ICRIER’s Director and Chief Executive Rajiv Kumar.
As against the 2.3% GDP growth rate recorded in 1951-52, the economy grew by 9.4% in 2005-06.
“It (economic performance) could always be better, but we haven’t done badly given the situation we were in,” said chief statistician and Secretary, Ministry of Programme Implementation, Pronab Sen.
But for the disappointing 1970s, the country has done reasonably well, he said, adding that economic policy should focus on human resource development and poverty alleviation.
Based on the foundation laid in the past 60 years, the Approach Paper to the 11th Plan proposed to push GDP growth rate to 10% in the terminal year 2012. Finance Minister P Chidambaram, however, is of the opinion that double digit growth is achievable as early as 2008-09 through improvement in performance of farm sector.
The biggest challenge is to sustain the growth momentum through appropriate policy initiatives, Kumar said, adding: “We also need to address the issue of continuous weakening of ethical and moral base which has led to poor governance.”
Independent India clocked its first double digit growth of 10.5% in 1988-89, fuelled by the highest ever rate achieved by agriculture sector at 15.4%.
The next highest came in 2006-07 at 9.4%, which assumed significance as it was over a high growth rate of 9% clocked in the previous fiscal.
For the current year too, several think tanks and the PM’s Economic Advisory Council headed by former RBI Governor C Rangarajan have projected a growth rate of 9%.
This is in contrast to RBI’s forecast of 8.5%, considered to be conservative by many, including Chidambaram.
These figures look impressive considering the 2.3% GDP growth rate India recorded in 1951-52, when the country launched its first Five Year Plan.
Since the launch of economic reforms in 1991-92 by the then Finance Minister Manmohan Singh, the country has not looked back. In fact, the Ninth Five Year Plan (1997-02) saw an average growth rate of 5.5%, which further moved up to 7.2% during the Tenth Plan (2002-07).
The 11th Plan, the most ambitious plan drawn by the government so far, proposes to achieve an average growth rate of 9 per cent during 2007-2012, with the aim to push the GDP to 10% by the end of the period.
Having witnessed negative growth rates in four years since 1951-52, India has virtually immuned itself from any such possibility in future.
The widespread drought witnessed in 2002-03, which pulled down the agriculture sector growth to a negative of 5.9%, unlike in the past did not have a deleterious impact on overall economic growth.
The GDP growth rate, which slipped to 3.8% in 2002-03, bounced back to 8.5% in the subsequent year.