Targeting 7%+ growth for next 2 decades: DEA secretary

New Delhi: India isn’t looking for a short burst of accelerated economic growth but a sustained expansion rate of over 7% for at least the next two decades, which requires a whole “reimagining” of its financial sector, economic affairs secretary Ajay Seth said on Tuesday.

Delivering the valedictory speech at a Confederation of Indian Industry event in Mumbai, Seth said: “We are not looking for growing at 7% for a couple of years and then lapsing back to a lower rate”.

“What we are looking for is growing at that pace, 7% for the minimum, maybe 7.5%, possibly 8% in some years, but sustaining it over next two decades (to realise the developed India by 2047 goal).”

The International Monetary Fund has forecast India will remain the world’s fastest-growing major economy in the current fiscal year and the next, with rates of expansion touching 7% and 6.5%, respectively, more than double the global averages.

The secretary called for “deepening and widening” the corporate bond market, expanding access to insurance, pension and capital market products, and improving the quality and efficiency of financial services that would reduce the intermediation cost.

Over 98% of corporate bond issuances are private placements, he said. Over 80% of the issuances are AAA-rated. “That means a very vast segment of economic players are unable to tap the bond market, and that (deepening the bond market) is something we need to grow at 7% plus for 20 years,” he said.