India has the potential to grow at 8 to 9 percent from the current 7 percent, said American economist Nouriel Roubini, highlighting that the reforms being initiated by the Modi government are in the "right direction", but the pace of passing them is sluggish.
Roubini said that Indian economic reforms process is hindered by the opposition parties, while speaking at the Global Business Summit in New Delhi.
"Potential growth for India is much higher than seven per cent. It can be eight to nine per cent. Key thing for India is to continue what they are doing but the country needs to accelerate their pace of reform," Business Standard quoted Roubini as saying.
India's gross domestic product (GDP) growth was revised to 7.2 percent for fiscal year 2014-15 from a previous estimate of 7.3 percent. In its Mid-Year Economic Review in December last year, the government had cut its growth estimate to 7-7.5 percent from 8.1-8.5 percent for the current fiscal year.
"Despite number of global economic headwinds, Indian economy remains strong though pace of growth should be stronger," says Roubini.
The government was forced to delay the passage of key tax reform Goods and Services Tax (GST) bill in the winter session of Parliament, as the Congress-led opposition blocked its passage in Rajya Sabha.
"GST will eventually be passed. If we stay on the reform path there is scope for India to expand and touch double-digit growth in next three years," said Niti Aayog vice-chairman Arvind Panagariya.
Roubini, professor at the New York University's Stern School of Business, said India must "clarify" on the retrospective tax in order to give way to more foreign direct investment in the country.
He attributed the decline in Indian exports for a 13th straight month in December to a sharp depreciation in emerging market currencies compared to the Indian rupee.
"Exports have been hit by a fall in emerging markets currencies, while Indian currency has remained relatively resilient," he said.