Plan Panel sees economic growth at 8.5-9%

The Planning Commission today projected a 8.5-9% economic growth for this fiscal despite a slowdown in industrial growth in July.

"We have been predicting a slightly lower growth and the latest industrial output numbers are no reason to reassess the growth estimate," Montek Singh Ahluwalia, deputy chairman, Planning Commission said on the sidelines of the Plan Panel's meeting on ground water management.

The growth in the first quarter was good, but some slowdown in the second quarter was expected, Ahluwalia said adding: "I would rather call it a moderation in growth rather than slowdown."

To a query on whether the slowdown was on account of the tight monetary policy adopted by the Reserve Bank, he said: " No. I would call it a successful example of macro economic management, consistent with extracting non-inflationary potential of the economy by maintaining growth."

Economy grew at 9.3% in the first quarter of this fiscal, but industrial growth slipped to 7.1% in April-July from 13.2% in the same period a year ago.

Various experts have attributed the slowdown to higher interest rates, which forced consumers to cut spending on household items and automobiles, adversely affecting the manufacturing sector.

Manufacturing sector growth came down to 7.2% during the month as compared to 14.3% in July 2006.