'Tech import curb regressive, doesn't augur well for future'

Rakesh Mohan, a part-time member of the Prime Minister’s economic advisory council, has criticised the licencing requirement that the central government recently imposed on imports of computer hardware, calling the move “disturbing" and “regressive."

- Rhik Kundu

In an interview, the former RBI deputy governor said India has to remain connected to the Asian supply chain.

Edited excerpts:

Is double-digit growth a thing of the past for India?

It is going to be a big challenge in the next seven years. Global growth is going to be relatively low. The same is true for global trade. So, the external environment is clearly not as conducive for us as it was between 1992-2010. To get higher growth rates, investments need to go up. Public investment is better, but private investments need to go up further. To get 8% growth, you need something like a 37% gross domestic investment. We are currently far from that. These things will not happen unless companies grow faster, and this includes higher export growth. The annual growth of merchandise exports, for example, has been at 4% or lower in the last 10 years. This grew at 20% the decade before. So, to achieve 8% plus growth, gross domestic investment has to go up to 40% of GDP.

For investments to go up, savings need to go up. Strangely, gross domestic savings have contracted since 2010. It has two components, corporate savings and household savings. Trade growth also needs to be higher. But this is not expected to increase more than 5% in the next 10 years.