India’s economic growth may slip to about 7 per cent in the current fiscal in the wake of the ongoing global financial meltdown, Chairman of the Prime Minister’s Economic Advisory Council, Suresh Tendulkar, has said.
“My gut feeling is that it (economic growth rate) may come down to 7 per cent... We will take another look in January taking into account the data which are coming,” Tendulkar told reporters on the sidelines of a meeting called by the Planning Commission to review the implications of the global economic slowdown.
The council had in August forecast a gross domestic product (GDP) growth of 7.7 per cent. There were some positive and some negative developments which would have implications for India’s economic growth, he said, adding, “One or two decimal points above and below 7 per cent should not be a worry”.
The Reserve Bank of India, in its latest policy review on October 24, had projected a GDP growth of 7.5-8 per cent, while Finance Minister P Chidambaram recently expressed optimism that economy would grow 8 per cent despite the crisis. The International Monetary Fund (IMF), in its latest World Economic Outlook update released two days ago, projected a growth rate of 7.8 per cent for India, down by 0.1 per cent from its forecast in October.
“Seven per cent growth should not worry us. We will still be recording the second highest growth rate in the world (after China),” Tendulkar said.
Prime Minister Manmohan Singh, in his recent interaction with captains of India Inc, had said that “a crisis of this magnitude was bound to affect our economy and it has”.
India recorded an economic growth of 9 per cent in 2007-08 and is projected to grow at an average of 8.3 per cent during the Eleventh Plan period.