Against the background of these developments, it is plausible that GDS could rise to a range of 34-35 per cent of GDP by 2007-08. With a current account deficit of below 2 per cent of GDP, GDI could rise to a range of 36-37 per cent.
Given an incremental capital output ratio – a summary measure of the productivity of capital – of around 3.5 to 4.3, sustaining real GDP growth rates in the range of 8 to 9 per cent in the medium term appears eminently realisable.