Economic growth to slip to 7% in 2011-12: Plan panel

New Delhi: Planning Commission today said the country’s economic growth in the current fiscal will slip to 7 percent from 8.5 percent a year ago and may not touch 9 percent in the next financial year.

“Whether we can go back to 9 percent very next year is not likely, but I think we should be targetting in India, to do a lot better than 7 percent, that we will do this year,” Planning Commission Deputy Chairman Montek Singh Ahluwalia

said while addressing an automobile industry event here.

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He echoed views about the economic growth as expressed by Prime Minister Manmohan Singh on Sunday while addressing 10th Pravasi Bharatiya Divas in Jaipur.

Singh had said, “the Indian economy is expected to grow by about 7 percent this financial year ending 31 March.”

The country had recorded an economic growth rate of 8.5 percent in 2010-11 and was initially estimated to grow by 9 percent this fiscal. The growth rate projection, however, was scaled down gradually by the Reserve Bank as well

as the Finance Ministry.

The growth rate in the first half of the current fiscal slipped to 7.3 percent from 8.6 percent in the year ago period.

Emphasising the need for improving business sentiments, Ahluwalia said, “We need to revive investment climate to achieve higher economic growth.”

Stressing on the need for expediting the infrastructure development for high growth, he said, “there are big infrastructure projects which are stuck. Those need to be unstuck.”

The government, he added, is trying to identify major investment constraints to boost economic growth.

On monetary policy, Ahluwalia said, “lower interest rates are likely only when fiscal deficit is down.”

It is expected that the fiscal deficit will be more than the budget estimate of 4.6 percent of Gross Domestic Product (GDP) this fiscal.

PTI