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20-Aug2018

India will be back on recovery path with 7.5% plus growth this fiscal: Arvind Virmani

Expressing optimism on the growth of India, former chief economic advisor Arvind Virmani has said that the country's economic growth seems to be back on a recovery path and India will be on a firm 7.5 percent plus growth track this fiscal. He also said the US-China tariff war provides an opportunity to increase the country's exports to the US.

Virmani stated that economic growth, which has been subject to many ups and downs over the past seven years, seems to be back on a recovery path. He elaborated that domestically, the main risk to macro stability is politically driven government consumption spending at the cost of investment and fiscal prudence. If this temptation is resisted, the country will be back on a firm 7.5 percent plus growth track this year (fiscal). However, he noted that the rise in oil prices due to geopolitical factors like sanctions on Iran by the US is a concern.

Talking about the US-China tariff war, former chief economic advisor said it will have some short term disruptive effects on the global economy. He projected that the country will become a great economic power by 2035. He said that historically every government pushes up what are referred to as populist expenditure in the year leading up to the election and added that the test is if they keep it modest and don't disturb the trend in fiscal responsibility. Therefore, he said there is always a risk of fiscal slippage.


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