Outgoing World Bank President David Malpass lauded India's Union Budget that focussed on increasing investments and cutting down on subsidies. He said that a target of 8 percent economic growth is achievable and India needs to strengthen its private sector to become a global leader.
"Budget is making more investments and reducing subsidies and that's a good starting point. It's named 'Amrit kaal' which is a vision for future that includes 8 percent growth that's achievable."
The real engine for growth is small business that become medium businesses and they are the job creators, Malpass told CNBC-TV18.
He said that the private sector should be enabled that means more space for small and medium businesses and more women in labour force.
Malpass said that a more efficient banking system is critical for growth.
On the issue of inflation challenge before the world and rising interest rates, he said that zero percent interest rates was an abnormal situation and that couldn't have continued. However, he added that the central banks need to come up with more tools than just interest rate hikes.
"World has to find a way to get to the answer on inflation quicker than what is happening right now. It looks like a long drawn out process."
"We have to start from the premise that the zero percentage interest rate was an abnormal situation that couldn't continue."
He said that the Rupee has stabilised in recent months.
"That's an opportunity for India to show that it has got a stable financial system that can support a stable currency and therefore lower inflation."
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