"With a gross capital formation of 30 percent, India still has the potential to grow between eight to nine percent annually," Rangarajan said at the 39th foundation day of Coal India Ltd (CIL).
The former RBI governor said that the main problem which the Indian economy was facing now was the fall in the productivity of capital.
"Some critical inputs are not available and there is a delay in the implementation of projects," Rangarajan said.
"The economy is not getting adequate output by investment of capital," he said.
Critical inputs were mainly coal and power, Rangarajan added. He said that with speedy implementation of projects, the country could still grow at between eight to nine per cent.
He, however, said that as per the advanced CSO estimates, India would grow between five and 5.5 percent in the current fiscal. The current account deficit (CAD) was likely to be lower than USD 70 billion this fiscal, he said.


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