India's Growth Could Approach 9% With Further Reforms In Next 5 Years: Panagariya

India's economy expanded by a robust 8.4 per cent in the third quarter of FY24, surpassing expectations and marking the quickest growth rate in the past eighteen months

Arvind Panagariya, Chairman of the 16th Finance Commission, stated on Wednesday that India has the potential to substantially elevate its economic growth rate to nearly 9 per cent from the current approximate rate of 7 per cent through the implementation of additional reforms over the next five years. Panagariya emphasised that Prime Minister Narendra Modi's diligent efforts over the past decade have significantly improved India's business environment, attracting increased investment to the country.

"Today, the economy is open. In the next 2-3 decades, we can sustain a very rapid growth," Panagariya said while speaking at the Times Now Summit in Delhi.

India's economy expanded by a robust 8.4 per cent in the third quarter of FY24, surpassing expectations and marking the quickest growth rate in the past eighteen months.

"India is currently growing in real rupees at about 7 per cent or so per year. Certainly, with a few more reforms in the next five years, we can realistically push it to close to 9 per cent, certainly somewhere at 8-9 per cent, and that can be sustained easily for a couple of decades," the economist said.

In response to a query regarding former chief economic adviser Arvind Subramanian's remarks on India's recent gross domestic product (GDP) figures being 'absolutely mystifying' and challenging to understand, Panagariya remarked, "If you are mystified, then first you have to check, (whether) mist is on your own glasses... or somewhere else." Panagariya highlighted that the methodology shift in GDP calculation under the Modi government was suggested by committees established during the previous administration (UPA government).

"Nobody... has questioned the integrity of those who actually do these (GDP)numbers. This is a new kind of phenomenon, which I don't understand," he said.

Panagariya stated that if critics suggest flaws in the GDP calculation methodology, "they have to come in and point out the fault so that we can talk about how to make the improvements.”

Previously, Subramanian said that the latest numbers of  India's GDP are "absolutely mystifying" and challenging to comprehend. "I want to be honest with you that the latest GDP numbers, I just simply can not understand them. I say that with genuine respect and things. They are absolutely mystifying. They don't add up. I don't know what they mean," Subramanian said recently.