Indian economy to grow 7-8% in next two decades: NITI Aayog Vice Chairman Arvind Panagariya

Indian economy, which has grown fairly rapidly in the last 17 years, will grow at 7-8 per cent in the next couple of decades, former Niti Aayog Vice Chairman Arvind Panagariya said on Wednesday.

He also rejected the idea of comparing India's economic situation with that of Sri Lanka, which is facing an economic crisis, and emphasised that India is a very stable economy.

"We have been growing fairly rapidly in the last 17 years... We will grow 7-8 per cent in the next couple of decades," Panagariya, who is currently a Professor of Economics at the Columbia University, said.

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Speaking at an event organised by Columbia Global Centre here, he noted that the country's economy grew 7.4 per cent between 2014-15 to 2019-20.

The World Bank has cut India's economic growth forecast for the current fiscal to 7.5 per cent.

India's economy grew 8.7 per cent in 2021-22 where it had contracted 6.6 per cent in the year-ago period.

On GST, Panagariya said, "we should get to two GST rates (structure).... Also, we need to prune the GST exemption list."

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A nationwide Goods and Services Tax (GST), which subsumed 17 local levies like excise duty, service tax and VAT and 13 cesses, was rolled out in July 2017.

Under GST, a four-rate structure that exempts or imposes a low rate of tax of 5 per cent on essential items and top rate of 28 per cent on cars is levied. The other slabs of tax are 12 and 18 per cent.

On certain experts and politicians comparing the current situation in Sri Lanka with that of India, Panagariya said, "it is nonsense to compare the current economic situation in Sri Lanka with India. India is a very stable economy."