India can end up with a real GDP growth of five% this financial year excluding the inflation rate, Bibek Debroy, the chair of PM's Economic Advisory Council said.
In the present scenario achieving a nine% GDP growth will be difficult, he said at the Tata Steel Kolkata Literary Meet here.
"The aspirational growth rate could be between 6.5% to 7%. At this stage it will be difficult to attain nine% GDP growth," he said.
"This year the growth rate will end at five% and this is real and not nominal ... Next year, the GDP growth rate could be anything between 6 to 6.5%," he said.
Recently IMF had pegged India's GDP growth at 4.8% for 2019-20, much less than its October projection of 6.1%. Debroy said that Indian economy at present is growing in an environment which is somewhat protectionist and has declining exports.
"The period during which the country grew at high GDP growth rates like nine%, the exports-to-GDP ratio was 20%. But now with developed countries resorting to protectionism and after the collapse of the WTO, contribution of exports to GDP in a large way does not seem possible", hesaid.
Debroy said "With India being strong in services and not manufacturing, the country will have to give some to get some."
On taxation regime, he said that the country is moving towards stable direct tax regime without any exemption.
"Goods and Services Tax (GST) is still work in progress. GST was supposed to be revenue neutral. But the government has lost revenue post-GST implementation, which is not tenable," Debroy said.
He said, "When both direct tax and GST rates get stabilised in future, a day might come when there would be no need to present budgets in the Parliament".
Regarding the high cost of capital, Debroy said it will continue to be so as it is a scarce resource in India.
