New Delhi: Projecting 6-6.7 per cent growth for 2003-05, Asian Development Bank (ADB) on January 22 said the ambitious target of 8 per cent gross domestic product (GDP) growth during the 10th Plan could be achieved only by speedy reforms, especially reduction in fiscal deficit and easing of foreign direct investment (FDI) norms.

"It is a challenging target. The 8 per cent growth is not impossible but I think it is ambitious," ADB director general (South Asia) Yoshihiro Iwasaki said, adding it could be achieved if reforms are accelerated.

ADB, which pegged down the GDP estimates for this fiscal after the droughts, projected 6 per cent GDP growth for 2003-04 and 6.5-6.7 per cent for 2004- 05.

He said India needs to increase its investment rate to 28-30 per cent, especially in the private sector, from the present 25 per cent and increase investment efficiency.

Iwasaki said norms need to be eased in order to invite greater foreign direct investment. "With policy changes, India might come up with larger amount of FDI," he said.

India also needs to carry out policy reforms in fiscal consolidation. "It is a recognition within government that fiscal deficit is high. The overall deficit of Centre and states is over 10 per cent of GDP, which is one of the highest in the world," he said.

Lauding tax reforms proposed by the Kelkar Task Force, Iwasaki said introduction of Value-Added Tax, lifting of some exemptions and improving tax administration would help in increasing revenue collections.

This, along with expenditure control through cutting down on subsidies, would facilitate efforts towards fiscal consolidation.

PTI