India can deliver a 10 per cent growth provided the farm output touches four per cent annually and industry and services grow in double digits, top bureaucrats said in New Delhi on Tuesday at a meeting with industry captains.
"Sustained double digit gross domestic product (GDP) growth is largely contingent on the farm sector achieving sustained four per cent GDP growth over the coming years," said Cabinet Secretary KM Chandrasekhar.
He laid emphasis on creating and meeting the rural demand to achieve sustained and inclusive growth.
"During the economic slowdown when the exports markets had shrunk, it were the rural markets that industry had turned to for sustained growth," Chandrasekhar said during a closed-door deliberation with secretaries of various ministries and top business leaders on whether India can achieve a sustainable growth rate of 10 per cent by 2014.
Echoing Chandrasekhar, Finance Secretary Ashok Chawla said that to achieve double-digit growth agriculture will have to grow at four per cent, industry at 12 per cent and services at 10.5 per cent.
"Investments should rise to 40 per cent of GDP, for which savings rate will need to increase from 35 per cent to 37-38 per cent. The remaining 2-3 per cent will come from external sources," said Chawla.
Revenue secretary Sunil Mitra pointed out that the challenge is to broaden the tax base, moderate the rates, and simplify the norms.
"The Direct Tax Code (DTC) is a major step toward simplification of tax provisions. Direct tax reforms have resulted in direct tax rising from 2.9 per cent of GDP in 2000 to 6.36 per cent in 2009," said Mitra.
According to Mitra, Goods & Services Tax (GST) once effective would will enhance the competitive edge of manufacturing and service companies and create a common market across the country.
The meeting was organised by the Confederation of Indian Industry (CII).