Economy will pick up by year-end: RBI chief

Economy will pick up by year-end: RBI chief

India's economy will pick up by the year-end thanks to the start-up of billions of dollars worth of stalled resource projects and a good monsoon season that will bolster agricultural production, the Reserve Bank of India's chief said on Tuesday.

The Reserve Bank of India is due to review monetary policy on October 29, with a rising pace of inflation bolstering odds for another central bank interest rate hike even as the economy stumbles through its worst crisis since 1991.

"The correct question is: are you going to raise rates or not? The answer is: I'm not going to tell you," Raghuram Rajan told an academic audience at Harvard Business School in Cambridge, Massachusetts.

The RBI governor later said that he believed India's economic growth would start to pick up in the fourth quarter after a commission gave the green light to scores of resource projects that had been put on hold during a sweeping government review of transparency and environmental policy.

He said about half of the $115 billion worth of stalled projects had been cleared.
"The effects of that clearance will show up toward the end of the year. So growth will start picking up because these large projects will start coming back onstream," he said.
He did not give a forecast for fourth-quarter growth.

"The second piece of good news is the monsoon has been very good... with a bountiful harvest, and with the associated activities like animal husbandry, poultry, also picking up, you can see a lot more value in the rural areas, which will help sentiment and growth," he said.

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