Even though India is likely to achieve an 8 per cent gross domestic product (GDP) growth in 2010-11 on the back of successive stimulus packages, there are not enough indications that the economy is on a sustained recovery path, Chief Statistician Pronab Sen said here today.
“There is no evidence of fresh investment and a serious question of sustainability for both consumption and investment. For private demand also there is no case to believe that we are in a sustained demand scenario. Given the present indications, there is no strong demand recovery,” Sen said at an interactive session.
Apprehensive of a ‘sustained’ growth trajectory, Sen said consumption demand was sluggish at 2 per cent, against the desired level of 5-7 per cent.
“The stimulus should continue until we are confident that private demand is back. The government has already started rolling back the fiscal stimulus package, and RBI has also taken steps in this monetary policy. RBI’s course of action depends on what evidence it has on the full revival,” Sen said.
In the last quarter of 2009-10, while consumer durables saw a 30 per cent increase in demand, consumer non-durables picked up just one per cent.
Sen said consumer durables purchase was not a good indicator of the economy’s recovery, as it could be due to one-time rise in income of government employees on the back of implementation of the sixth pay commission.