Kolkata: Prime Minister’s Economic Advisory Council (PMEAC) chairman C. Rangarajan on Friday said India has the potential to grow by 8-9% at the present rates of gross capital formation.

“With a gross capital formation of 30%, India still has the potential to grow between 8-9% annually," Rangarajan said at the 39th foundation day of Coal India Ltd. (CIL).

The former Reserve Bank of India (RBI) governor said that the main problem which the Indian economy was facing now was the fall in the productivity of capital.

“Some critical inputs are not available and there is a delay in the implementation of projects," Rangarajan said.

“The economy is not getting adequate output by investment of capital," he said. Critical inputs were mainly coal and power, Rangarajan added.

He said with speedy implementation of projects, the country could still grow at between 8-9%. He, however, said that as per the advanced Central Statistics Office (CSO) estimates, India would grow between 5-5.5% in the current fiscal. The current account deficit (CAD) was likely to be lower than $70 billion this fiscal, he said. PTI