Indian economy can sustain 9-10 percent growth: expert

New Delhi -- The Indian economy will be able to sustain a 9-10 percent growth, despite a few deterrents like declining fertility rates and poverty, says a leading economist.

"India is at a structural break. The GDP (gross domestic product) growth is set to accelerate to 10 percent as the figures speak for themselves," said Surjit Singh Bhalla, chief executive of Oxus Research and Investments, a Delhi-based economic research, asset management and emerging-markets advisory firm.

He was speaking at a discussion on mid-year review of the Indian economy held at the India International Centre here Saturday.

"The fertility level is dropping faster than expected in the country and recently in Orissa it has declined from 2.5 to 2.4 percent," he said.

A decline in fertility rates results in the decline of young population, which in turn increases the number of pensioners.

Saying that the current official figure of the poverty rate being 22 percent was disputable, he added, "The survey done by NSS (National Sample Survey) showing the poverty rate is approximately 22 percent misses out on 55 percent of national accounts consumption, including food consumption rates, which are very important factors to determine the level of consumption.

"According to some measures, the poverty rate is 43 percent while according to others it is 23 percent," Bhalla added.

He emphasised: "Agricultural growth as such was lower in the last decade. However, it is constant at 2.9 percent except for the 1970s when it was 1.9 percent.

"Share of agriculture is now below 20 percent and it is rapidly declining," he said.

"The growth of Industry at above 8 percent seems likely and if industry grows at 9 percent, GDP will grow at 8 percent and if it increases by 10 percent then GDP will grow at 10 percent."

However, he also pointed out the fact that almost all the developing countries of the world have witnessed an 8 percent growth in industry, except for India, which has not reached that level even once.

"This has happened due the tightening of our policies and interest rates in the mid-1990s when the interest rates shot up to 10-12 percent," he averred.

Speaking on India's growth vis-à-vis China's, he said, "Chinese savings and investment rates are set to decline and India's to increase. The Indian growth rate is set to exceed China's on a sustained basis by 2010."