The Indian economy is likely to register a growth of 9.5% in this financial year, former Chief Economic Advisor Arvind Virmani said on January 11.

Addressing a virtual event organised by industry body PHDCCI, Mr. Virmani said government expenditure and exports have peaked, but so far private consumption has not recovered due to the COVID-19 pandemic.

“The current financial year’s growth will be higher and close to 9.5%. And this decade’s (FY21-FY30) average growth will be 7.5% plus minus 0.5%,” he said.

According to the recent government data, the Indian economy is estimated to grow at 9.2% in 2021-22, as against 7.3% contraction in 2020-21.

The Reserve Bank of India (RBI) has lowered the growth projection for the current financial year to 9.5%, while the International Monetary Fund (IMF) has projected a growth of 9.5% in 2021 and 8.5% in the next year.

The eminent economist said India’s GDP growth is now positive, but job growth is lagging.

Stressing that Micro Small and Medium Enterprises (MSMEs) are critical for inclusive growth, he said modern MSMEs should have full opportunity to compete with the corporate sector.

Mr. Virmani noted that COVID-19 pandemic hit economic recovery and pushed for tax reforms. GST council seems focussed on short-term revenue maximisation, he said.

“Revenue negative GST simplification needed to provide a consumption stimulus to the economy, and quickly restore lost jobs and wages,” he said.