The economy can grow by 8.0 per cent if the government improves the public administration and delivery systems, carry forward legal reforms and implement policies promptly, former Reserve Bank Governor, Bimal Jalan said on Tuesday.
"India has the potential to be one of the fastest growing nations in the world on a sustained basis. But we have to resolve many problems to realise the potential of the Indian economy," Jalan, now a member of Rajya Sabha, said delivering the Montosh Sondhi memorial lecture at the Confederation of Indian Industry in New Delhi.
Asserting that 8.0 per cent growth in GDP was possible, he said the economy was losing out about 2.0 per cent due to sharp deterioration in public delivery system, decay in public administration, improper implementation of policies and legal hurdles.
Future growth prospects seem uncertain unless government takes care of the ground level problems, Jalan said.
"The broad macro economic picture has never been better," he said, referring to the industrial revival, all time high forex reserves and soft interest rates.
Jalan said the yields on 10-year government paper was comparable to that of the US and other developed nations.
He said the country, which has seen balance of payment crisis throughout 1954-2000, has been able to absorb the shocks of Iraq war, global downturn, international oil price volatility, and yet build high forex reserves.
"The feel good factor is back with better corporate performance and greater credit availability and reforms," Jalan said.
He, however, warned that the economic growth of 6.0 per cent expected this fiscal was below the potential.