India’s GDP is growing at 7.9% and is expected to overtake China in 4/5 years according to India’s newly appointed chief economic advisor and renowned economist Kaushik Basu.

India could return to a higher growth trajectory of 8-9 % in two years, but it needs to invest
more in infrastructure for sustaining such growth, World Bank president Robert Zoellick said on Friday.

Winding up his four-day visit here that included meetings with prime minister Manmohan Singh, finance minister Pranab Mukherjee and other key government functionaries, he said: “India has emerged from the economic crisis with a clear vision of what it will take to accelerate back to earlier growth rates and beyond”.

The country’s 11th five year plan ending in 2012 has set a growth target of 9%. However, GDP growth slipped to 6.7% in 2008-09, after three years of over 9% growth, in the aftermath of the global crisis. The strong fiscal and monetary policies of India had helped counter a decline in exports and withstand some of the external shocks from the food, fuel and financial crisis, he said. He added the World Bank would look at giving assistance to large consolidated projects rather than individual ones.

Professional forecasters have added to Reserve Bank of India (RBI) Governor Duvvurri Subbarao’s dilemma on timing the exit from an accommodative monetary policy stance.

The Economic Times reports a median forecast released by RBI in the pre-policy ‘Macroeconomic and Monetary Developments: Second Quarter Review 2009-10’ this evening lowered the economic growth projection to 6 per cent from the 6.5 per cent projected three months ago. At the same time, the forecast on inflation based on the wholesale price index (WPI) was raised to 3 per cent, as against 1.6 per cent estimated earlier.

Last week, the Prime Minister’s Economic Advisory Council headed by C Rangarajan had said the economy could grow between 6.25 per cent and 6.75 per cent, as against the 7-7.5 per cent projected in January.