The Prime Minister's Economic Advisory Council (PMEAC) on Monday lowered India's gross domestic product (GDP) growth estimate for 2011-12 to 8.2% from an earlier 9%, but noted that this happened in an uncertain global climate.
The C Rangarajan-led panel, presenting a mid-year report on a day the US barely managed to avoid a looming debt default, said benchmark inflation was likely to remain high at 9% till October, though it is expected to close the fiscal year at 6.5%.
"The projected growth rate of 8.2 per cent, though lower than the previous year, must be treated as high and respectable given the current world situation," the council said.
The PMEAC's projection is higher than the Reserve Bank of India's 8%, but it is it is lower than the government's 8.5%.
The council backed the RBI, which has raised interest rates 11 times in 16 months.
"It is certain that the RBI will have to continue to maintain a tight monetary policy stance for quite some time, given the combination of domestic inflationary situation and the international backdrop," Rangarajan told reporters.
The council wanted the government to release food stocks liberally to keep inflation in check while keeping in check the fiscal deficit, noting it "is not going to be an easy task."