India poised for 10% GDP growth by 2011

India is well on its way to touch the figure of 10% GDP growth within 2011, according to a survey recently conducted by Organization for Economic Cooperation and Development (OECD). According to OECD, India can arrive at 10% growth if goes ahead aggressively with its reform process that should include privatization, labor reforms, and opening up of retail and financial sections. The Paris-based organization, while examining the Indian economic system, observed that red tape, overstretched substructure, prohibition on foreign direct investment (FDI) are some of the factors that might act as impediments to reforms hurting overall development. OECD secretary-general Angel Gurria said that more vigorous reforms are necessary to improve business environment and infrastructure, bring about discipline in public finance and usher in labor market reforms. The Indian economic system recorded an average growth rate of 8.6 percent in the last four years. The Reserve Bank of India (RBI) estimates that the Indian financial system is expected to grow by 8.5 percent in the existing fiscal (2007-08), below than 9.4% in the last financial. OECD also expects the economic system to grow up by 8% in the coming year (2008) due to the effect of high interest rates.

According to the OECD survey, market-based reforms initiated since the 1980s had helped India reduce poverty. The survey feels that past experience should convince Indian policymakers that greater liberalization will bring in more growth dividends.

It called on the Indian government to resume the country’s privatization program that has been lying dormant because of opposition from the Left parties.

Global investment bank Lehman Bank has also expressed similar views in its recent report titled “India: Everything to play for.” According to the report, the Indian economic system will develop at 10% over the next ten years, if it goes ahead with structural reformations including deregulated labor market, liberalize investment rules and keeps government spending under control. It observed that the labor efficiency and structural modifications in the business sector were responsibly for driving growth in recent years.