On the back of robust economic growth at about 8 per cent in the second quarter of the fiscal, the Prime Minister’s economic panel today said the economy is likely to grow by 7 per cent in the current fiscal.
“We had earlier estimated it (growth) at 6.5 per cent but probably it will be higher than that. It could be 7 per cent,” Prime Minister’s Economic Advisory Council Chairman C Rangarajan told reporters on the sidelines of a seminar.
Asked when the Council would revise its growth projection for the country, he said, “We brought out the outlook only in October. So we probably will do it in January.”
The economy clocked a growth of 6.7 per cent in 2008-09, a year when the financial downturn had set in, impacting India as it was other countries.
However, belying predictions, the Indian economy grew by a significant 7.9 per cent in the second quarter of this fiscal, up from 6.1 per cent in the previous quarter, essentially due to a good showing by the industry and the services sector.
Rangarajan, while commenting on the high growth in the second quarter, had said the overall growth figure may have to be revised upward.
”The latest numbers do indicate that the industry and services area are growing strongly. This could offset the impact of decline in agricultural production,” Rangarajan said.
Agriculture rose by 0.9 per cent, against expectations of contraction in the second quarter.
The manufacturing sector grew by 9.2 per cent compared to 5.1 per cent in the corresponding period of last fiscal and mining and quarrying by 9.5 per cent versus 3.7 per cent recorded in FY09.
Community, social and personal services expanded by double digit at 12.7 per cent against nine per cent.
Rangarajan said that he expected no change in fiscal policy by the end of the this fiscal, but the central bank’s main focus would now be to tame inflation.
“I expect no change in fiscal policy till March-end, 2010,” he said.
He further said RBI’s monetary policy would now be more focussed on inflation and the central bank is likely to watch the price situation in November and December before taking a call.
Overall wholesale price inflation stood at 1.34 per cent for the month of October while food inflation has crossed 15 per cent in the second week of November.
The RBI has projected that overall inflation could rise to 6.5 per cent by the end of the current fiscal.
