E-Paper
Govt sees rosy 7.75% growth
Shrugging off the after-effects of a bad monsoon and a global financial meltdown, the government said in a mid-year review on Friday that the economy could grow close to 7.75 per cent in this fiscal year.
Shrugging off the after-effects of a bad monsoon and a global financial meltdown, the government said in a mid-year review on Friday that the economy could grow close to 7.75 per cent in this fiscal year.
The latest surge in inflation, however, is a “cause for concern”, said the review, which was tabled in Parliament by Finance Minister Pranab Mukherjee.
Also, analysts said the growth forecast for 2009-10 was optimistic, as it would require the economy to grow at 8.5 per cent through the last two quarters. The economy grew 6.1 per cent in the April-June quarter and 7.9 per cent in the July-September period — leaving the first half of the fiscal year with a GDP growth of 7 per cent.
It is the spurt in the second quarter that has encouraged the government to project a high growth for the full year.
“The growth outlook for the next two quarters and for the whole year is likely to be in the upper bound of the range (7.75 per cent) predicted; and may exceed it,” the review said.
Mukherjee said the government would closely watch signals in key sectors to gradually withdraw stimulus measures introduced last year in the wake of a downturn.
Credit rating firm Crisil’s chief economist D.K. Joshi told HT that the forecast was an optimistic one, observing that the economy needed to grow by at least 8 per cent in the remaining two quarters after its lower 6.1 per cent growth in the first quarter. “The pressure would be on RBI to take some steps to tame inflation as demand is expected to rise significantly in the coming months,” he said.
