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The Indian economy is estimated to have grown by 8.6 percent in the January-March 2010 quarter and may grow to the upper end of an estimated range of 8.25-8.75 percent this fiscal, Chief Economic Advisor at the Finance Ministry Kaushik Basu said.

Delivering his Keynote Address at the ASSOCHAM organized Conference on Private Equity, Basu added that the economy’s growth is poised to touch 10 percent in the next four years.

“I feel the remarkable turnaround that has taken place in the economy is really by and large through very careful fiscal measures, but there is a battle ahead,” he said.

The central bank will be reviewing the monetary policy this week and a 25-50 bps hike in key policy rates is expected to tame inflation. “I believe inflation is still high; it’s still a point of concern. We do need policies for [containing] it, but inflation has probably peaked,” Basu said, adding that inflation, which hovered around the double digit mark for a while, would fall below that within two months or so.

The Chief Economic Advisor, however, added that Reserve Bank of India will make some judicious intervention to address the issue of inflation, which is a cause of concern both for government and RBI, without making any direct references for possible interest rates hike by RBI in its forthcoming monetary policy.

Elaborating on the need to capitalize on the growth momentum, Basu proposed a three-pronged strategy for India. Laying thrust on exports, he also suggested an increased share of total trade as a percentage of its national GDP and making India the hub for higher education in the world.

He pointed out that share of total trade of India–comprising its exports and imports–are currently at 46 percent, as against total share of trade as percentage of national GDP of Korea, which is estimated 90 percent, and that of 76 percent of China.

India would have focus on increasing exports by intensifying its foreign external engagements and invite foreign institutions of higher learning to set up their campuses in India, so that such education is able to create skills required to meet present days requirement both for government as well as industry, said Basu, adding that foreign direct investments in higher education would work as an enabling factor and contribute to national growth.

Speaking earlier at the ASSOCHAM function, Planning Commission Advisor Gajendra Haldea regretted that the National Highway Authority of India is yet to be restructured as per recommendations made by the Planning Commission. As  a result, not much foreign investments have been assured in areas like airports, seaports and national highways.

The NHAI should be restructured to ensure that investments–especially private investments–flock in the infrastructure sector as targeted by the government, felt Haldea.

Among others who spoke on the occasion are T.N. Thakur (Chairman, Power Trading Corporation), Suneet Maheswari (CEO, L&T Infrastructure), Subbu Subramaniam N. (Chairman, VZCAI) and Udai Dhawan (Director, Standard Chartered Pvt. Equity Advisory India).

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ASSOCHAM, Chief Economic Advisor, Conference on Private Equity, economy, finance ministry, fiscal, GDP, Kaushik Basu, monetary, RBI, Reserve Bank of India