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PM panel likely to cut projections for eco growth, inflation

business Updated: Jan 22, 2009 21:24 IST

The growth rate of the Indian economy is likely to be revised downwards for the current fiscal from earlier estimate of 7.7 per cent by the Prime Minister's economic advisory panel on Friday, as the economy is showing signs of slowdown due to the global financial crisis.

Also, with the WPI-based inflation hovering around sub-six per cent at present, the panel is expected to cut its projections for the rate of price rise from earlier estimates of 8-9 per cent by this fiscal end.

The panel will release new projections for the economy during 2008-09 on Friday.

According to panel member Saumitra Chaudhuri, "inflation will come down to 3-4 per cent by the end of the fiscal."

Earlier, Prime Minister's Economic Advisory Council Chairman Suresh Tendulkar had said he expected India's GDP to grow at around 7 per cent during the current fiscal.

"We will have a relook at our projections in January. My gut feeling is it could be seven per cent, or one or two percentage points here and there," Tendulkar had said.

There are some positive and some negative developments which will have implications on India's economic growth, he had said, adding, "one or two decimal points above and below 7 per cent should not be a worry".

In August last year, the panel had projected the economy to grow at 7.7 per cent this fiscal. Then, Tendulkar had said 7.7 per cent economic growth rate will not be "unrespectable and would be second highest growth rate by any country."

PMEAC member GK Chadha had said, 7.7 per cent growth rate would be "very respectable...One should not forget that there are business cycles and growth cannot move only in one direction." Rangarajan attributed the slowing down of the economic growth to factors like rising oil and food prices in international market and global slowdown triggered by sub-prime crisis in the US.