India's growth rate could revert to the pre-global crisis level of 8-9% in 2-3 years by intensifying the recent economic reforms initiatives, internationally acclaimed economist Jagdish Bhagwati has said.
“I would say if they stick with the measures they have undertaken and intensify them further...I think if you do think of that sort, then we could get back to 8-9% GDP growth in 2-3 years," said Bhagwati, who is a professor of economics and law at Columbia University.
India had been growing around 8-9% before the global financial meltdown of 2008. The growth rate in 2011-12 slipped to nine-year low of 6.5%.
Recently, the government had liberalised FDI policy in retail, aviation and approved changes in the banking and insurance laws, with higher FDI limits.
Finance minister P Chidambaram has said India's economy should expand by 5.5-6% this year. “All I can say is this year we will probably hover around 5.5-5.6% or maybe 6% if things pick up in third and fourth quarters. This year is practically set and no major dramatic changes can be expected this year," Chidambaram said.
On growth versus welfare debate, Bhagwati said, “People like Amartya Sen and Mehbus ul Ha used to say growth won't influence poverty. Now, it is clear that growth did influence poverty.”
“Until 1991, it was reasonable to argue that growth would influence poverty. After 1991, we could say that clearly, growth has the capacity to pull more people into gainful employment. I call it the pull-up affect, not trickle down," the Columbia University professor added.
Bhagwati, with his colleague at Columbia University Arvind Panagariya, in their recent book "India's Tryst with Destiny: Debunking Myths that Undermine Progress and Addressing New Challenges" have addressed growth vs welfare debate.