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India 2011-12 GDP may be over 7pct – PMEAC

Prime Minister's Economic Advisory panel chief Mr C Rangarajan said the economic growth rate in 2011-12 could be over 7% slightly higher than the projection of the Central Statistical Organisation.

Mr Rangarajan who is the chairman of the Prime Minister's Economic Advisory Council said that "If industrial production picks off in the current quarter, then I will not be surprised if the final or revised estimate is 7% or more than 7%.”

His comments came after the CSO, in its Advanced Estimates, said the economic growth is likely to fall to a three year low of 6.9% in 2011-12. This, it said, was mainly due to sharp slowdown in manufacturing, agriculture and mining sectors, against 8.4 per cent expansion in the last fiscal.

Mr Rangarajan, however, expressed hope the GDP growth may turn out to be better in 2012-13 due to likely decline in inflation, improvement in infrastructure and greater clarity on issues like land acquisition and environment.

He further said the broad macroeconomic parameters relating to savings and investment are conducive to achieving a growth rate of 8 to 9 per cent in a sustained manner.

He said for a sustained high growth, inflation must be tamed and fiscal deficit contained.

He added that "Inflation continues to remain an area of concern in the current fiscal...We must use all of our policy instruments... to bring down current inflation and re-anchor inflationary expectations to the 5% comfort zone.”