Chief Economic Adviser Raghuram Rajan on Thursday said economic growth seemed to be stabilising and efforts should be made to strengthen the recovery process.
“Hopefully, economic growth is stabilising. Certainly every move that government is trying to make (will) help to strengthen growth,” Mr. Rajan told reporters here.
On the sudden spurt in industrial growth to 8.2 per cent in October, he said, “we should not be overtly influenced by one number... We should take it as part of pattern”.
The industrial production growth rate bounced back to a 16-month high of 8.2 per cent in October on good performance of the capital goods and manufacturing sectors, indicating sudden recovery in the economy. The growth in the domestic economy would be influenced by the developments in the U.S. and the eurozone countries, Mr. Rajan said, adding that there was a need to tap into domestic sources of growth to drive the economy.
“Clearly India will be influenced by growth constraints in Europe. After all our exports are part of the production. So If exports are declining as it has been recently, it will obviously going to have influence on the economy,” he said.
India’s exports in November contracted 4.17 per cent year-on-year, for the seventh month in a row, to $22.2 billion, due to slowdown in demand in the U.S. and European markets.
India’s economic growth has declined to 5.4 per cent in the first-half of the current fiscal, from 7.3 per cent in the corresponding period a year ago.
The GDP growth in the 2011-12 fiscal was at a nine-year low of 6.5 per cent.