Economic deceleration is expected to continue in the third quarter of 2011-12 and India may end the financial year with a 7% GDP growth rate, deputy chairman of the Planning Commission Montek Singh Ahluwalia said in Mumbai on Wednesday.
"So far, we are not sure whether in Q3, the deceleration will end. October index of industrial products was not good, but a 7% growth will still be a very good performance compared to what is happening elsewhere," Ahluwalia said while delivering the third M Visveswaraya Memorial Lecture organised by the World Trade Centre.
Stating that 2011 was a difficult period for the world economy, Ahluwalia said the industrial economies have contracted, while the developing economies are slowing down.
"There is likely to be no growth in the economies of European countries," he said.
"The Planning Commission is going ahead with the 9% growth projection for the 12th Plan period as a whole, even though the country may not return to that figure immediately next year," he added.
Calling for cutting down of subsidies to improve fiscal deficit, Ahluwalia advocated removal of petroleum subsidy.
He, however, defended the food security subsidy, saying it is a targeted subsidy and the incremental allocation is only Rs 21,000 crore.
The lecture is organised every year in memory of Bharat Ratna awardee Mokshagundam Visweswaraya who was an engineer, scholar, statesman and the diwan of Mysore during 1912-1919.