By NNN-PTI,
New Delhi : The current fiscal may witness moderation in growth due to global financial crisis, coupled with certain other factors, but it will still be fairly robust at 7-8 per cent, while inflation will soften due to meltdown in global commodity prices, according to Finance Ministry.
“While it is difficult to quantify the impact of developments abroad and at home on GDP growth, it is possible to indicate factors that may result in some moderation in growth… GDP growth should still look fairly robust…A growth between 7-8 per cent will still be one of the best under these circumstances,” the ministry said in a report on Monday.
There has been a meltdown in global commodity prices led by decline in crude prices, the ministry said in the report released at the Economic Editors’ Conference here today.
“The positive impact may get reflected through a moderation in inflation, improving the corporate profitability through input cost reductions and increasing their internal accruals,” the report said.
Decline in crude prices have moderated the prices of products which use crude/products as inputs (fertilisers, chemicals, man-made fibres), energy substitutes (coal and gas), energy intensive products (metals), products used as bio fuels (edible oils, oilseeds, sugar) and primary commodities, which have competing synthetic products (natural rubber, cotton), the ministry said.
Inflation came down to 8.90 per cent as a result of falling global crude and metal prices.
On overall growth, the report said many sectors in the economy would see a moderate impact of the crisis and domestic factors, while four sector, including agriculture and electricity, would face a “neutral” impact.
One sector–community and services would see a positive impact, while mining would face negligible impact, the report said.