India’s Growth May Beat China in 4-5 Years, Basu Says (Update1)
By Kartik Goyal
Jan. 4 (Bloomberg) -- India’s economic growth may quicken to 10 percent in a “couple of years,” exceeding that of China as early as 2014, said Kaushik Basu, chief economic adviser to the South Asian nation’s finance ministry.
India’s relatively large young population will help increase its savings rate to more than 40 percent of gross domestic product, from 38 percent, and spur economic expansion, Basu said in New Delhi. The government has no plans to “suddenly” withdraw pro-growth measures unveiled last year to shield the economy from a global recession, he said.
“It isn’t an impossibility for India to cross China’s growth rate in the next four to five years,” Basu said. “The high savings rate will trigger a period of sustained economic expansion.”
India’s GDP may rise more than 7.5 percent in the year to March 31, he said, beating a central bank forecast for an increase of about 6 percent. China’s economy may have expanded 10.5 percent in the fourth quarter of 2009, according to the median estimate of 32 economists surveyed by Bloomberg News.
Policy makers aren’t expected to take monetary measures to curb a surge in food prices, Basu said. Wholesale food prices increased 19.83 percent from a year earlier in the week ended Dec. 19, near the fastest pace in 11 years.
“Right now, there’s no expectation of monetary tightening nor do I believe there’s a reason for it,” he said. The price increase is “very sector-specific, which needs sector-specific intervention.”
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