GDP growth may top 7% after 6 years

The finance ministry today said India's gross domestic product might exceed 7 per cent in the current fiscal on the back of good rains and a bumper harvest. The 7 per cent figure will be the strongest full-year growth in the last six years.

The last time India's economy grew over 7 per cent was in 1996-97, when it touched 7.8 per cent. Severe drought pulled down the country's growth rate to 4.3 per cent last fiscal.

Addressing a press conference, Chief Economic Adviser Ashok Lahiri said the government was well on track to meet the tax collection and fiscal deficit targets for 2003-04. This year, the fiscal deficit has been estimated at 5.6 per cent of the GDP.

"The first-quarter estimate of GDP growth did not take into account the impact of the monsoon," Lahiri said, adding that its impact would be seen in the second quarter.

The GDP growth during April-June 2003 was 5.7 per cent. With a bumper harvest, it was possible to push the GDP growth rate above 7 per cent this fiscal, he said.

Lahiri said the government finances, too, were stable and revenue had gained momentum in September.

In the first half of the current fiscal, the total direct tax collections were 12.5 per cent higher at Rs 33,440 crore compared with Rs 29,750 crore during the corresponding period last fiscal.