India is likely to grow at a rate slightly over 6 per cent in fiscal 2010, global rating agency Standard & Poor’s said in a study released on Friday.
“For FY’10, our current forecast is, to be precise, 6.1 per cent. Six per cent is where we see it. We see the first-half at about five per cent and the second-half at about seven per cent,” S&P’s Asia-Pacific Chief Economist Subir Gokarn, who conducted the study, said here.
Stressing the need for credit flow, he said there is enough room for the apex bank to lower key policy rates.
“The problem is not with what RBI is doing, the problem is with what the banking system is doing. If the banking system is not advancing (credits), it doesn’t matter what RBI does, because all that liquidity simply gets plugged back into securities. That narrows the scope of the stimulus quite significantly,” Gokarn said.
Further, the agency said it expects signs of a pick-up to emerge in the second-half of the year.
“The commentary believes domestic demand, though slowing, and India’s high savings should continue to play key role in financing the country’s growth,” S&P said.
S&P expects growth to recover to about 7.3 per cent in calendar year 2010.