Indian economy to grow by 8.3 pc in 2010, says ESCAP

 “With a revival in investment and private consumption, growth in exports and a strong expansion in industrial production in recent months, growth in India’s Gross Domestic Product (GDP) is projected to accelerate to 8.3 per cent in 2010,” the ESCAP said in its Economic and Social Survey for Asia and the Pacific 2010. It also said the structural growth impulses of the economy remained strong , given the high domestic savings rate, sound financial system and the macro economic policy environment supportive of growth. India’s economic growth, which is estimated to grow by 7.2 per cent in 2009-10, slowed down to 6.7 percent during 2008-09 from 9 per cent in the previous three fiscal years after the global slowdown. 

The Survey cautioned that the surge in food prices in India was a matter of concern. But the UN expert body projected that retail price inflation would cool down to 7.5 per cent this year from12 per cent last year.

Chief Economic Adviser Kaushik Basu said, “the inflation would come down to 6 to 7 per cent in coming three months time”. Referring to some of the problem areas of the Indian economy the Survey said “yet another challenge for the economy is to manage portfolio capital inflows mainly FIIs that are leading to build up of bobbles in capital markets and putting upward pressure on the exchange rates.”

Asked whether the government would take any measure to control inflows of FIIs, Basu said “there is no need for any capital controls to check inflows as these have been at a comfortable level.”