There could be signs of an economic revival from the second quarter of the current fiscal even as several projections suggest that 2009-10 could be worse than last year.
The Planning Commission has pegged the growth rate for the current fiscal at 6.5-6.7 per cent, while the United Nations’ Economic and Social Commission for Asia and the Pacific (ESCAP) said it could be even lower at 6 per cent.
The government has, however, underlined that its three stimulus packages are showing results. Economists expect full results by June.
Mahesh Purohit, director of the Foundation for Public Economics and Policy Research, said election expenditure and the final outcome would have an impact on the economy. “We will see some signs of economic revival by the second quarter though it would take another six months for things to stabilise,” Purohit told Hindustan Times. He added that credit demand would pick up in the next three months.
M D Mallya, chairman and managing director Bank of Baroda added that credit growth is picking up though it is likely to stable at 24 per cent in the new fiscal. “We will decide on the credit growth projection only after the Reserve Bank of India’s monetary policy,” he said. Corporation Bank chairman and managing director JM Garg echoed the same sentiment. “We expect to see credit demand normalising by July-July,” he said.