By IANS,
New Delhi : The Prime Minister’s Economic Advisory Council Wednesday projected a lower growth of 6.5 percent for the Indian economy during the current fiscal year due mainly to a two-percent decline anticipated in farm output over the previous year.
While industrial output, the council said, will rise 8.2 percent, as against 3.9 percent growth in the previous fiscal, services will also register a lower growth of 8.2 percent against 9.7 percent in 2008-09.
“It is unlikely that growth will be lower than 6.25 percent, but may reach 6.75 percent,” council chairman C. Rangarajan said, after presenting the report to Prime Minister Manmohan Singh here.
The country’s gross domestic product (GDP) had expanded 6.7 percent last fiscal.
“Indian economy has done well in recent years,” Rangarajan said, adding: “The Indian economy has also weathered the economic crisis well and India remains the second-fastest growing economy in the world.”
The other highlights of the report are:
– The Indian economy weathered the financial turbulence well
– There were well-calibrated adjustments in the monetary and fiscal policies
– Recession, demand contraction in rich nations have impacted export
– Further negative shock in global financial system can threaten India’s growth
– Investment rate projected at 36.5 percent in 2009-10
– Savings rate projected at 34.5 percent in 2009-10
– Rabi (winter) crop prospects are good
– Projected food grain production in 2009-10 223 million tonnes
– Current account deficit will be 2 percent of GDP
– Exports projected at $188.9 billion in 2009-10
– Imports projected at $306 billion in 2009-10
– Merchandise trade deficit projected at $117 billion
– Capital inflows projected at $57.3 billion
– Surge in food inflation and 13 percent annualised increase in wholesale price index
– Huge 33 percent rise in index for primary food index
– Global inflationary pressures will remain high especially in oil and commodities
– Inflation in March 2010 expected around 6 percent
– Bank credit sluggish till September 2009
– Corporate sector raised large amounts from the domestic market
– Projected consolidated fiscal deficit at 10.09 percent in 2009-10