Indian economy to rebound in the next 12 months, says ex-ADB chief economist
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| Indian economy will rebound in the next 12 to 18 months, said Dr Satish Chandra Jha, former chief economist of Asian Development Bank who was also a member of Prime Minister's Economic Advisory Council during UPA-I. |
Indian economy will rebound in the next 12 to 18 months, said Dr Satish Chandra Jha, former chief economist of Asian Development Bank who was also a member of Prime Minister's Economic Advisory Council during UPA-I.
"That Prime Minister has woken up is a good sign for the country's economy. Indian economy should grow at 6.5 percent next fiscal," Jha told ET. Jha's report to Congress president Sonia Gandhi in 2003 shocked many within the Congress as he argued that India could grow at whopping 10 to 12 percent of the GDP in just a few years' time. Jha, then a member of the Congress' economic cell chaired by Manmohan Singh, was only marginally wrong as India registered upto 9 percent of the GDP growth.
During the last few months, Jha has differed with many global analysts arguing that India has increasingly become a dangerous place to invest. In a Standard & Poor's-organized seminar in Manila in May this year, Jha said India's economic problems would be a short-term phenomenon.
"I am a strong believer of the India story. But we must remember a few things. No country in the world has moved forward without FDI, with heavy doses of subsidies, and without fiscal consolidation. Those who are shouting slogans against FDI in retail have not understood how much it may benefit Indian farmers and aspiring middle class consumers," Jha said.
Jha however said he would not agree with Vijay Kelkar's recent assessment that India might go back to the 1991 era if the subsidy burden continued. "The economy has not reached that stage. There is no need to panic," Jha said.
On the recent diesel price hike, Jha said Indian government was rather late in taking the tough calls. "It's a political problem. Every government in the past has tried to bypass the issue of subsidy. But when 75% of our fuel requirement is imported, we must wake up before it becomes very late," he said.
Indian economy will rebound in the next 12 to 18 months, said Dr Satish Chandra Jha, former chief economist of Asian Development Bank who was also a member of Prime Minister's Economic Advisory Council during UPA-I.