Encouraged by 8.6 per cent growth rate estimates for current fiscal, Chief Economic Advisor Kaushik Basu today said a 9 per cent economic expansion for the next financial year is “well within target“.
“The prospects for the world as a whole are looking better but still there are uncertain clouds. In that scenario, growth of 8.6 per cent is absolutely remarkable. So the 9 per cent which we are aiming for next year is now looking well within target,” Mr. Basu told reporters.
On whether the inflation would affect the growth process, Mr. Basu replied, “I really don’t see inflation disrupting the growth process.”
He said in fact the GDP number would have a dampening effect on inflationary pressures.
“We have been concerned about inflation but I really feel that the number we have got today is going to dampen inflationary expectation. So I am not seeing that (inflation) could jeopardise the growth story.”
Mr. Basu further said that growth rate for the next two quarters were also looking encouraging but IIP number, which has been fluctuating is to be looked at.
The 8.9 per cent growth in the first half of the current fiscal, notwithstanding, the government is battling high inflation, particularly food inflation.
The overall inflation has remained above the comfort zone of 5—6 per cent for over a year now.
The food inflation is ruling at 17.05 per cent for the week ended January 22.
The RBI in its quarterly monetary policy review last month upped the March—end inflation projection to 7 per cent, from 5.5 per cent.
