Stressing on appropriate balance between regulation and innovation, the Prime Minister's chief economic advisor, C. Rangarajan on Tuesday predicted a growth rate of over 6.5-7 percent in the next year and over 8 percent in the subsequent years.
Saying that he is optimistic about increasing growth rate in future, Rangarajan said that what gives him the confidence is the fact that the investment trade has not gone down much to justify the slump in current growth rate.
He was delivering his keynote address on "The global economic meltdown - Causes and consequences" at the Observer Research Foundation (ORF) here after releasing an ORF-RLS publication titled "The Global Economic Meltdown: Perspectives from India and EU".
Rangarajan admitted that despite India's fast recovery from the global financial crisis, investment trade did come down, "but that was not much to justify" the current growth rate.
He said the incremental capital output ratio rose because of problems in the availability of raw materials in the power sector like coal, gas, etc.
Rangarajan said once we fix problems in the availability of raw materials, the growth rate would pick up.
He agreed that India needs a growth rate of more than 8 percent to create more jobs.
Underlining that growth is very important to find resources to fund programmes meant for poor, he stressed on the need for having the "appropriate balance" between regulation and innovation.
Cautioning that the people should not draw wrong lessons from the financial crisis, he said: "While regulation is important, innovation is also important. We should strike an appropriate balance between regulation and innovation."
He also stressed on the need to fix imbalances in the global system as well as in the US economy and warned that unless it is fixed, growth prospects of the world can be affected. (ANI)