Vibrant Gujarat Summit: 'Economy Needs $800 Billion Annually For 7% growth'

 Share
EMAIL
PRINT
COMMENTS
Vibrant Gujarat Summit: 'Economy Needs $800 Billion Annually For 7% growth'

Prime Minister Narendra Modi addresses the Vibrant Gujarat Global Summit 2015 in Gandhinagar. (Press Trust of India)

Gandhinagar:  India needs $ 800 billion (Rs 50 lakh crore) annually if the economy is to grow at 7 per cent, Financial Services Secretary Hasmukh Adia said on Monday.

Noting that last year fund inflows from all traditional channels of FDIs, ECBs, FIIs and domestic capital was way below $ 200 billion, he said that government, planners and the industry would have to find alternate sources for this huge amount to finance growth.

"If the economy is to grow at 7 per cent, given a nominal inflation of 5-7 per cent, and a credit-to-GDP multiple of 1.3 per cent, the average growth rate in financing will have to be 18 per cent. In terms of numbers it comes to $ 800 billion per year," he said at the Vibrant Gujarat Summit.

While $ 130 billion came from domestic financial institutions and banks, USD 13.4 billion came from foreign institutional investors, FDI was worth USD 21.6 billion and $ 32 billion came through the ECB route, he said.

He said debt inflows through FPIs is in the range of minus $ 4.6 billion last year and the highest was USD 9 billion in FY 2012. "So, that is something that we cannot depend on," he said.

He also said that against an annual requirement of $ 800 billion net foreign institutional investments and net FDI investments were only about $ 35 billion last year. The ECB component was USD 32 billion.

"Put together, we had about $ 70 billion dollar coming into the country. There is a huge gap in financing and going by this figure, I would think we cannot solely depend on FDI and FPIs for funds but we will have to develop internal sources of funding) and that's where the challenge is," he said. 


Share this story on

 Share
ALSO READAs Eman Ahmed Plans To Leave India, A Warning From Her Doctor

................................ Advertisement ................................

................................ Advertisement ................................

................................ Advertisement ................................