Structural reforms necessary to achieve 7-8% growth: Jayant Sinha

NEW DELHI: Pitching for structural reforms, Minister of State for Finance Jayant Sinha today said they were necessary for achieving a sustainable growth of 7-8 per cent and making India a $5 trillion economy in next 12 years.

"If we take our $2 trillion economy and get it on the sustainable 7-8 per cent growth rate then we have a situation when the economy doubles in 10 or 12 years to $4 trillion economy. If rupee strengthens we may end up getting closer to $5 trillion economy," he said while addressing the Delhi Economics Conclave here.

Sinha also made a strong pitch for "deep structural reforms" to achieve a sustainable and non-inflationary growth of 7-8 per cent over longer period of time.

"We also need to get the economy up to a long term growth rate of 7-8 per cent, it will have ups and downs. But ultimately long term growth rate for the Indian economy has to be 7-8 per cent," he said.

Sinha said there was a need to control inflation at 4-6 per cent over the years.

Listing the priorities before the government, he said, there is a need to pursue macroeconomic stability, build world class infrastructure, unlock entrepreneurial energy and put in place social security system.

Sinha also made a case for supply side revolution to enable the country dramatically increase its growth potential.

As per official estimates, economic growth in the current fiscal ending March 2015 would be between 5.4 and 5.9 per cent. The growth had slumped to sub-5 per cent in the earlier two consecutive fiscals.

Stating that fiscal deficit is a cause of worry, former RBI Governor and head of Expenditure Management Commission Bimal Jalan said: "Expenditure is always a concern and the revenue stream has not been as good as we thought".

He said the Commission would look into minimisation of subsidies, but at the same time maximisation of benefit to the people at the least administrative cost.

The Commission is entrusted with the responsibility of suggesting ways to rationalise food, fertiliser and oil subsidies and narrow the fiscal deficit.

It is expected to submit its interim report before the presentation of Budget for 2015-16 and the final report before Budget 2016-17.