A turnaround in India's growth story can be expected from here onwards, helped by an improving state of affairs in the US and China, Raghuram Rajan, Chief Economic Advisor to the Finance Minister, told NDTV Profit in an exclusive interview today.
"The figures given out by CSO (Central Statistics Office) on the country's growth are backward-looking," Mr. Rajan said.
According to the CSO, India's economic growth rate this fiscal year is estimated to be a poor 5 per cent, the lowest in a decade.
Having rejected the CSO figures, Mr. Rajan said that the country's economy is in the process of stabilising and that a 5 to 5.5 per cent growth in Gross Domestic Product (GDP) is too low for an economy of India's size.
In the annual Economic Survey, tabled in Parliament earlier in the day, and authored by Mr. Rajan, the GDP growth rate for the financial year beginning April 1, 2013, has been pegged in the range of 6.1-6.7 per cent.
Mr. Rajan, however, stressed that reform policies will be needed to pep up growth.
On reforms, he said: "There are no magic bullets for India's reforms agenda ... Reforms in the next financial year have to be a set of small measures."
A big hurdle in the government's reform drive has been inflation. "Food inflation is likely to moderate in the next few months, which will give the Reserve Bank some room to cut interest rates," Mr. Rajan said, adding that a tamed inflation will also help push household savings rate up.
The headline inflation rate moderated to its lowest level in more than three years in January 2013, thanks to a slower rise in fuel and manufactured goods prices.