Goldman Sachs sees 7% growth potential for India

Global investment banking firm Goldman Sachs said today that the long-term potential growth rate of the Indian economy would be 7 per cent and this could be notably higher provided the reform process gains momentum.

Goldman Sachs has maintained an 'overweight' rating on the Indian markets, supported by better earnings growth, a reform push by the government and a revival in the global economy.

"Although we feel the current long-term potential growth rate of the economy is 7 per cent, this could be notably higher if the reform process were to gain momentum," Goldman Sachs said in a research note.

According to the firm, India is expected to clock 6.5 per cent real growth in 2013, which would rise to 7.2 per cent in 2014 and further to 7.5 per cent in 2016.

India had been growing at an impressive rate of 9 per cent before the global financial meltdown pulled the growth rate down to 6.7 per cent in 2008-09.

Goldman Sachs lauded the recent reforms initiatives and said, "The key to unlocking India's potential growth has been, and remains in, the area of reforms.