Growth above 8 pct sustainable: Rbi

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Old 31-Mar-2009
Growth above 8 pct sustainable: Rbi

Mumbai March 31:
Backed by high domestic demand, Indian economy will bounce back to an above eight per cent growth over the medium term, a Government report said.

"It is felt that India would return to its trend of eight per cent-plus growth rate over the medium term as economic normalcy returns in the global economy," a report prepared by Committee on Financial Sector Assessment (CFSA) and headed by RBI Deputy Governor, Rakesh Mohan said.

Highlighting the salient features of the report, Mohan told reporters that the high savings and investment would act as a catalyst to regain the high-growth momentum. "We are confident that in view of an overall high domestic demand, increase in productivity and high credit growth, an above eight per cent growth is sustainable over the medium term," Mohan said.

However, the growth would be moderate in the short term owing to uncertain global market conditions, he added. Despite the global financial crisis, Indian banks have remained robust and healthy in the recent past in terms of capital adequacy but the asset quality may come under stress in the backdrop of economic slowdown, Mohan said.

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