USE THIS SLOWDOWN TO OPEN UP SERVICES AND MANUFACTURING

Paris-based Organisation for Economic Co-operation and Development’s (OECD's) Economic Survey of India 2019 report forecast 5.8 per cent GDP growth in 2019/20. The survey hinted at a positive momentum thereafter with 6.2 per cent growth in 2020/21. In an exclusive interview with Business Today’s Joe C. Mathew, OECD Chief Economist Laurence Boone says India must look at the slowdown as an opportunity and speed up reforms

- Laurence Boone

The monetary policy committee of the RBI says India’s GDP is likely to grow 5 per cent in 2019/20, less than your forecast. Is OECD a bit ambitious in its projection of 5.8%? We had made this forecast before the latest quarterly GDP growth numbers were out. At the time we made the forecast, we were the most pessimistic of all international organisations. Today, we are probably more in line or slightly optimistic. If you were to take into account (the number for the June-September quarter), we might have revised it a little lower.

The government is talking about making India a $5 trillion economy by 2025. Isn’t this a difficult target even if one takes your near-term projections of 6.2 per cent growth forecast for 2020/21 and 6.4 per cent for 2021/22 for granted?

What is more important is that people are converging on the diagnosis (of problems that are slowing down the Indian economy) and what can be done to improve it. A large focus is appropriately made on investment growth.

Can India alone reverse this trend?