New Delhi: The Indian economy is expected to grow at between 7.8% and 8.2% in the current fiscal year, according to a projection by the Confederation of Indian Industry (CII).

Sumit Mazumder, the newly elected president of CII, an industry lobby, said that India will achieve double-digit growth in its gross domestic product (GDP) sooner than expected.

“What we are projecting for this year is between 7.8-8.2%. I am very hopeful that we shall be in double digits a lot quicker than we thought. If I see what has been achieved in the past ten months, the foundation has been laid, not fully, but the process has begun," Mazumder said in an interview on Friday.

The government has pegged GDP growth at 7.4% during 2014-15, based on a debatable new method, which would put India on par with China’s growth. A series of economic reforms initiated by Prime Minister Narendra Modi’s government has reignited investor confidence in the country.

Since it came to power in May, the National Democratic Alliance has allowed 100% foreign direct investment (FDI) in railway infrastructure, increased the cap on FDI in defence and insurance to 49% from 26%, and eased FDI rules in construction.

On 2 April, rating agency Moody’s revised India’s credit outlook to positive from stable.

An expert agreed with the CII prediction, but worried about the monsoon. “The growth last year was 7.4%. Going by that, we do expect a rise of 50 basis points, provided the monsoon remains normal," said Dharmakirti Joshi, chief economist at rating agency Crisil Ltd. “A normal monsoon will ensure a rise in agricultural production. Oil prices are also expected to remain low which will boost consumption," he said.

Mazumder said growth will be propelled by infrastructure and manufacturing. “If you look at the US, it gauges its economy is recovering if the housing sector goes up. All over the world, it is infrastructure which is the basic indicator that the economy is on its way to recovery," he said.

In India, four of every 10 central government infrastructure projects are running behind schedule or have overshot original cost estimates, according to data shared by the ministry of statistics and programme implementation with the Lok Sabha on 18 March.

“Some of them should be allowed to die a natural death. I have no sympathies for those companies. But those who genuinely got stuck in the old PPP (public-private partnership) process need handholding," he said. “Banks are not willing to fund them because they have a lot of NPAs (non-performing assets) with these guys. So, there has to be some sense of bond mechanism or something whereby funding is available to these guys. They get a new lease of life, do their jobs and then start paying for their past discrepancies."

Mazumder said the government’s Make in India programme will play an important role in tackling unemployment, following a workforce boom in the country. “Manufacturing, to me, is extremely important because it is only through manufacturing that we’ll be able to create the kind of jobs that are required. I don’t see why not—if we could get our act right, we could be the factory to the world. We have the resources, we have the people, the manpower and the capability, and we have everything. So why can’t we become the world’s factory?"

Crisil’s Joshi said the onus lies with the private sector to bring investments into manufacturing. “In infrastructure, the government can play an active role, but the more worrying thing is the low utilization in the manufacturing sector. And there, the onus is more on the private sector to raise investment," he said.

Mazumder said the government is on the right track as far as creating an enabling environment to facilitate business is concerned. “I believe some of the initiatives that the government has put out are very much focused on industry. We don’t need a quick fix; we have had a lot of those and lot of failures. I like an expression about India—it seems to be forever arriving. So, these quick fixes we can do without. Let’s do it steady and let’s do it right," he said. “Some results are on ground. But to expect that the government is going to correct all ails of years and years in 10 months is mighty unfair."

Mazumder remained confident that differences between the centre and states won’t delay the implementation of the goods and services tax (GST). “The way the government is talking and listening to the finance minister, I have the conviction that we will see GST in 2016-17. The issues (of centre-state conflict) have been addressed to a very large extent. They are compensating them and the centre says, ‘whatever you lose, we’ll pay you’. What more can you ask for?"

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