The economy has experienced a paradigm shift in enced a paradigm shift in the momentum of growth in the past few years. After growing at an average rate of 3.5 per cent between 1950 and 1980, the economy saw an annual average growth rate of 6 per cent in the 1980s and 1990s. The initiation of the reforms and emergence of services sector led to acceleration of growth process and put India on a high growth path. The resultant increase in incomes coupled with favourable demographics supported domestic demand, providing impetus to manufacturing and investment activities.

Over the last decade, India emerged as one of the fastest growing economies in the world.

It is estimated that the increase of per capita GDP in India from $500 to $1,000 has added about 90 million people to the Indian consuming class. We have already seen what this has meant for the savings rate, for consumption, investment and financial markets.

So, what would sustained high growth mean for India?

First, let us talk of whether this can be achieved. I believe we are indeed capable of achieving a sustained double-digit growth.

Our economy today has the same characteristics as Japan and China in the early years of their growth: favourable demographics, knowledge capital, industrial competitiveness and increasing savings rate. These growth drivers are largely selfsustaining. India's strong domestic consumption and investment growth and high savings rate provide for the basis for a long period of high growth. Reforms and continuation of a facilitative policy environment is all that is required to maintain this momentum. To understand how such rates of growth impact a country, let us look at China, which grew at a CAGR of 9.5 per cent for over 25 years since it began its economic reforms in 1979.

The impact of such high growth was phenomenal. China's GDP grew tenfold over this period.

According to official statistics, the poverty rate fell from 53 per cent in 1981 to 2.5 per cent in 2005. Wealth creation and infrastructure development in China is there for all to see. At a growth rate of 12 per cent, our GDP would double in about seven years and result in an economy as large as China over the next decade. This will imply significant increase in household wealth, supporting a virtuous cycle of savings, consumption and investment. At this level of income there is a demand for better living standards and with increased affordability, large-scale infrastructure development will become a reality. With a sustained 12 per cent growth, the consuming class will expand exponentially.

It will result in significant infrastructure demand and investment. The trickle-down effect of such rapid wealth formation would have a dramatic impact on poverty. Increased wealth generation will result in greater economic inclusion along with increased opportunities for the masses. Such a growth process will draw greater foreign capital.

We are placed at an exciting juncture in our economic evolution and I look forward to the next decade with optimism and hope.