Govt to revise growth forecast next week

The new growth projection will be released on December 7

trithesh

Trithesh Nandan | December 2, 2010



The government is going to revise its estimation of economic growth next week, egged by a strong performance in the first two quarters of FY'10.

“We had earlier given projection of 8.5 percent. We will revise it. We are in middle of calculation. It is very likely that it will be revised upwardly,” chief economic adviser to the finance ministry, Kaushik Basu said in New Delhi on Thursday.

However, Basu avoided mentioning a probable figure, saying, “I can’t give you the number right now. There are people working on it. Government will give its projection on December 7.”

But as has been hinted by the chief economic adviser, it is likely that the revised estimate will peg the Indian economy to grow at 9 percent in the current fiscal. “It is not impossible any more. We are very close to that,” Basu told reporters.

If the growth is projected at 9 percent, it will be closer to what International Monetary Fund (IMF) predicted in October this year in a revised estimation. “The International Monetary Fund has revised its growth forecast for India in FY '10, raising it to 9.7 percent from the July figure of 9.5 pc,” the IMF had said in October.

“We in the ministry of finance always had disagreed with them on this point, because the IMF projected higher growth then us, but now we are in position to revise it,” Basu said.

In fact, in September, Manila-based Asian Development Bank (ADB) had also revised India’s growth at 8.5 percent for FY’10 but cautioned that high inflation could undermine the strong growth.

But Basu is expecting inflation to ease further. It is due for release on December 14.

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