The Planning Commission has said growth in the agriculture sector this fiscal would be as high as 5-6 per per cent, which would help the economy to surge by 8.5 per cent as projected by it earlier.
“I am absolutely certain that this year we are going to see more than four per cent agriculture growth. My guess would be that we should be somewhere in the 5 to 6 per cent range,” Planning Commission Deputy Chairman Montek Singh Ahluwalia said during Karan Thapar’s show ‘India Tonight’ on CNBC-TV18.
He said, “The underlying logic of that (economic growth of 8.5 per cent with upward bias) quite simple is that if you get an agriculture growth of something like 5 per cent or a little more, which is possible, that alone will add one percentage point to overall growth rate of the economy.”
About the concerns expressed by experts that the economic growth would slow down in the second quarter of this fiscal (July-September) due to base effect, he said, “It is not a cause of concern.”
“The 8.5 per cent growth which is what we are calibrating or could be a little better. This only requires just about double digit growth in industry. So there is a lot of room for industrial growth to slow down and for our aggregate growth performance to be on track,” he added.
About the industrial growth, he said that the country would end the fiscal with double digit factory output.
Asked about meeting fiscal deficit target of 5.5 per cent of GDP, he said, “There is no doubt that the 3G auctions will add money, there is also a demand for expenditure. My own guess is that we would achieve fiscal target.”
Expressing concerns over the price rise, he said, “I think indications are that when we get through present phase of higher inflation in vegetable which is result of rain and disruption and so forth ... we should be able to close to 6 per cent (inflation) by December.”
About the fall in Foreign Direct Investment (FDI) flows, he said, “I would not worry too much about the trend that you see over a few months’ time. I think the overall climate for FDI in India is extremely positive.”
FDI flows in the month of July tumbled 49 per cent on a year-on-year basis. The data for the April-July period was also bleak, falling 27 per cent year-on-year.
On discrepancy in data reported by the Central Statistical Organisation (CSO), he said, “we have a long way to improve the quality of this (data) what I would call high frequency data. Some of the high frequency data is very good.”
CSO had to correct economic growth data for April-June quarter after discrepancies were pointed out by some experts.
