Seven per cent growth not enough to match China: Jayant Sinha

Seven per cent of sustained GDP growth of India for next 20 years will not be enough for India to match China's current level of economic growth, Jayant Sinha, Minister of State for Civil Aviation said in Ahmedabad on Monday. Matching China's growth levels will be a big challenge, he said.

Sinha was in the city to deliver AMA - PVRN Iyer First Memorial Lecture on Á New Economy for a New India' at Ahmedabad Management Association (AMA) on the topic 'A New Economy for a New India'.

Giving statistics, he said that India's growth rate in dollar terms post liberalization in 1991 till 2017 was 8.9%.

During these 26 years, Indian GDP has grown from $225 billion to $2.5 trillion with a per capita income $1,800 per annum.

"If the country continues to grow at 7% for next 20 years, the per capita income will be at $5,400, which is much below China's current per capita income of $8,200," said Sinha, adding that even matching our northern neighbour's growth statistics will be a major challenge for India and to achieve it, the country needs a unique economic model.

Sinha said that the farm to factory model of industrial revolution and also adopted by China will be of limited use for India and instead advocated mass services as against mass production in developed countries.

Citing some the examples of mass services, he said that in India, the mobile phone tariff rates are the cheapest in the world as is becoming a game changer in many aspects, also the JAM (Jan, Adhar and Mobile) model is disrupting the financial services, which has enabled India to have the cheapest rate to open a bank account or to avail social security, especially for the poor. While assuring that in India banks are perfectly safe to park one's hard-earned savings, he accepted the fact that Indian banks are suffering from structural infirmities.

"Indian banks have structural infirmities like governance, lax credit structure and did not have enough capacities till a few years ago," he said. He, however, said that the current government had given over 20 licenses to create capacities and the banks are perfectly safe to parks once's hard earned savings.