Indian economy projected to grow at 7-7.5 per cent

India, after remaining in high growth trajectory continuously for the last four years is projected to grow at 7-7.5 per cent during the current financial year, official sources said.

The pace of growth next year, ie 2009-10, will be contingent upon how long the global recession lasts and how quickly capital flows return to normal, Ashok Chawla, secretary, department of economic affairs, said while addressing the `Third India China Financial Dialogue'.

With the presence of strong domestic demand stimulus, he said, India expects to maintain a strong pace of economic growth despite continuation of global recession.

He said the country has taken a number of steps to inject liquidity into the financial systems, recapitalised banks and other systemically important institutions to tide over the crisis. ''With overall investment climate becoming gloomy, private investment in developing countries would show a declining trend. Expanding investment in infrastructure by both the private and public sector could act as an effective countercyclical device to stimulate demand and to create conditions conducive for faster growth,'' he said.

He said India and China have identified banking sectors and capital markets as areas where the expert teams of both the countries to jointly work and evolve a time-bound strategy for closer engagement. Under the G-20 initiative, both the countries are represented in the four working groups to deal with issues such as enhancing sound regulation and strengthening transparency, international cooperation and promoting integrity in financial markets, reforming the IMF and reforming the World Bank and other multilateral development banks.

He observed that both India and China have to work together to ensure that reform initiatives usher in tangible results for developing nations.