PM forecasts GDP growth over 6.5 per cent this year

Firms such as Citi, Moodys and CRISIL have trimmed forecast to as low as 5.5%

 Prime Minister Manmohan Singh forecast India’s economic growth for this fiscal to be a little more than 6.5 per cent on Wednesday, a more optimistic take than a recent spate of private projections that saw growth slowing to as low as 5.5 per cent.

“Last year, our (India’s) GDP grew by 6.5 per cent. This year we hope to do a little better,” Singh said in his annual Independence Day speech, promising that faster infrastructure development would boost growth.

The 6.5 per cent GDP growth in 2011-12 was the lowest in nine years. The government’s original GDP projection for 2012-13 was 7.6 per cent.

“Recently we have taken new measures to accelerate infrastructure development. Ambitious targets have been fixed in roads, airports, railways, electricity generation and coal production,” he said.

Singh’s optimism on the growth front comes at a time when a host of major private forecasters including Citi, CLSA, CRISIL and Moody’s trimmed their forecast to as low as 5.5 per cent citing inaction on the policy front as one of the reasons for slowdown in economic activities.

Last week, global ratings agency Moody’s too lowered its growth forecast for India, predicting an expansion of 5.5 per cent in fiscal 2012-13. That would be India’s lowest growth in a decade.

Singh accepted that the economy was going through a difficult phase and blamed the global financial crisis and domestic politics. “Seen together, the European countries are estimated to grow zero per cent this year. Our country has also been affected by these external conditions,” he said.

He likened the economy to national security in terms of priorities and called on political parties to help the government pass key reforms to boost growth and investment. While not much can be done about the conditions prevailing outside, Singh said every effort must be made to resolve the problems inside the country to again speed up economic growth and job creation.

India’s GDP grew by over 9 per cent for three years before the 2008 global economic crisis.

The Prime Minister said his government is taking steps to accelerate infrastructure development and infuse confidence in foreign investors.

The 12th Five Year Plan would lay down measures for increasing the present rate of economic growth from 6.5 per cent to 9 per cent in the last year (2016-17) of the Plan, he added.