Moody’s has cautioned the government against targeting double-digit gross domestic product (GDP) expansion saying any growth beyond seven per cent without reforms will fuel inflation that would result in “more painful” future adjustments. “Some government policymakers, most notably RBI Governor D Subbarao, have begun pushing for a return to double-digit growth. This is wildly optimistic and, without significant structural reform, a dangerous view to take," Moody’s Analytics, an arm of ratings agency Moody’s, said.Subbarao had earlier this week said a growth rate of 5-6 per cent is not sufficient for the economy, which has the potential to grow at double digit rate provided some issues are addressed. “If we do the right things, we can get back on the track of the double digit growth,” he had said. Moody's said the pursuit of double-digit GDP growth three years ago “kept policy settings too loose for too long, causing the economy to overheat” and contributing to the current problems of inflation and the current account deficit.

Source - http://www.business-standard.com