Fuelled by healthy double-digit growth in manufacturing and services, the Indian economy has clocked over 9 per cent growth in the first six months of the current financial year.
During April-September, the GDP grew by a record 9.2 per cent. “Let us savour the moment,” Finance Minister P. Chidambaram said on Thursday.
While inflation, at 5.23 per cent, continues to be a “worry” for Chidambaram, experts caution about the possible overheating of the economy and the adverse impact of the decline in agriculture growth.
Former Reserve Bank of India governor Dr Bimal Jalan said: “The growth story so far is okay. But one has to exercise caution against possible overheating in the economy, especially with a glaring mismatch in over-flow of funds into the stock market and under-flow into banks.”
But the finance minister was not willing to buy this argument of overheating in the economy. Terming it “premature”, he cited a statement of the RBI deputy governor. Briefing newsmen, Chidambaram said, “Inflation at about 4 per cent is tolerable when the economy is growing at 9 per cent plus”. All macro-economic parameters were good, but inflation was the only worrying factor, he said.