The Planning Commission on Tuesday said the country’s economic growth in the current financial year will slip to seven per cent from 8.5 per cent a year ago and may not touch nine per cent in the next financial year.
“Whether we can go back to nine per cent very next year is not likely. But I think we should be targeting, in India, to do a lot better than seven per cent; that we will do this year,” Planning Commission Deputy Chairman Montek Singh Ahluwalia said while addressing an automobile industry event. While addressing the 10th Pravasi Bharatiya Divas in Jaipur on Sunday, Prime Minister Manmohan Singh had said, “The Indian economy is expected to grow by about 7 per cent this financial year ending March 31.”
The country had recorded an economic growth rate of 8.5 per cent in 2010-11 and was initially estimated to grow by nine per cent this financial year. The growth rate projection, however, was scaled down gradually by the Reserve Bank and the finance ministry.
The growth rate in the first half of the current financial year slipped to 7.3 per cent from 8.6 per cent in the year ago period. In the second quarter, the expansion was 6.9 per cent, the lowest in nine quarters. Ahluwalia said, “We need to revive investment climate to achieve higher economic growth.” Stressing the need for expediting the infrastructure development required for high growth, he said, “There are big infrastructure projects which are stuck. Those need to be unstuck.”
The government, he added, was trying to identify major investment constraints to boost economic growth. On monetary policy, Ahluwalia said, “Lower interest rates likely only when fiscal deficit is down.” It is expected that the fiscal deficit will be more than the Budget estimate of 4.6 per cent of Gross Domestic Product this fiscal.
