Concerned over the widening difference between growth projections and actual realisations, the Planning Commission has made a case for improving the economic model to project GDP.
"I think we are currently suffering from the fact that modelling of the economy is not as robust as it should be, given that the world situation is so much volatile. We should have been actually doing more on the modelling side, we are actually doing less," Planning Commission Member Abhijit Sen told PTI in an interview.
As against the Finance Ministry's projection of 7.6 per cent growth rate in 2012-13, the GDP expansion, as estimated by the Central Statistical Organisation (CSO), is likely to be only 5 per cent.
Sen said there is a lack of willingness on the part of the intellectuals and policymakers to think about remodelling the economy and the economic model should be more robust.
"...you have been in a situation where most of your predictions have been going wrong, the first thing should be asked why are the predictions going wrong. So you should actually be looking at what's wrong with that," he said.
On India's growth potential, Sen said the country can grow as much as 7.5 per cent as the savings rate is fairly high. "I would say that given our savings rate, which are still fairly high, I think 7-7.5 per cent is the sort of growth one would expect. We are well below that... I wouldn't actually go very much higher above 7-7.5 per cent."
He further said the growth of 5-6 per cent is too low for India, though, the growth of 8-9 per cent is also too high at which the country was growing earlier.
"I think 8-9 per cent also too high in the sense that we were riding a global wave and the global economy is now in a very different situation. Europe is still not out of recession completely, the US is improving and all other economies are slowing down. So I mean the work situation is very different from 8 or 9 per cent."