India can grow at GDP of up to 9%:Ex-CEA bats for lower loan interest rate ease of doing business for unlocking high growth rate potential

India can unlock 8-9% economic growth by accelerating structural reforms to reduce the cost of doing business and the cost of financing, former Chief Economic Adviser Krishnamurthy V Subramanian said on Monday, according to news agency, PTI. Private investment can drive growth: Ex-CEA Macroeconomic stability got India to 7 per cent growth. Institutional reforms can take India to 9 per cent.”India achieved above-8 per cent growth when private investment as a share of GDP was more than 30 per cent. We are currently at around 22-23 per cent, 7-8 per cent short of the target. -former Chief Economic Adviser Krishnamurthy V Subramanian Banks’ NPAs at multi-year low: Subramanian The ace economist added that currently, the banks’ NPAs have fallen to multi-year low levels in the country. He further added that the elevated public capital expenditure in the last five years has paved the way for the infrastructure that private investment would follow. Subramanian worked during BJP regime Subramanian served as India’s 17th Chief Economic Adviser from 2018 to 2021, and later as Executive Director at the International Monetary Fund. The eminent economist noted that India s macroeconomic foundations are strong and falling crude prices provide a near-term tailwind. What takes us from 7 to 9 per cent growth is the next wave of reforms: factor market, judicial and bureaucratic reforms that reduce the cost of doing business, and the cost of financing. -Subramanian Why FDI is on the fall in India? On the sharp decline in FDI and portfolio inflows, Subramanian said the Federal Reserve’s sharp tightening cycle pulled capital to dollar assets across all emerging markets. How can India bring back foreign capital? The eminent economist adds that domestic private investment is the magnet that attracts global capital. He further said that the way to attract durable foreign capital is through reforms that lower the cost of doing business.