PM's economic adviser expects economy to grow 8% in 2010-11

Indian economy would expand by 8 per cent during fiscal 2010-11 and return to the high growth trajectory of nine per cent a year later, Prime Minister's economic adviser C Rangarajan said on Friday.

Indian economy would expand by 8 per cent during fiscal 2010-11 and return to the high growth trajectory of nine per cent a year later, Prime Minister's economic adviser C Rangarajan said on Friday.

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"The economy would grow between 7 and 7.5 per cent in the current fiscal, it would grow by eight per cent in 2010-11 and in the year after that growth would be nine per cent," he told PTI.

The optimism of Rangarajan, Chairman of Prime Minister's Economic Advisory Council (PMEAC) and former Governor of the Reserve Bank, is based on firm recovery in the global economy and normal monsoon.

India's economic growth rate slipped from nine per cent to 6.7 per cent during 2008-09 on account of the impact of the global financial crisis. However, driven by stimulus packages and signs of recovery in the international market, the growth in the current fiscal is estimated to go up to 7.75 per cent.

"There is reason why I expect eight per cent growth in the next fiscal. Agriculture would improve with normal monsoon and it would add half to one per cent in the GDP growth," he said.

He added that the world economy and global trade would improve by fiscal 2011-12 and in that year, India would post nine per cent growth.

Signs of recovery became more visible today as the growth rate of India's exports turned positive in November after registering degrowth for 13 consecutive months since October 2008 due to widespread recession in key overseas markets.