JOIN US“Where we have had unequivocal success with the current economic policy is in the case of growth. With the economy showing distinct signs of sustainable recovery we hope the current fiscal to end with a growth of 8.5 per cent,” Chief Economic Adviser Kaushik Basu told newspersons here on Friday.
Though the economy posted an impressive 8.8 per growth rate in the first quarter of the current fiscal (April to June, 2010) he projected that the growth rate in the second quarter (July to September 2010) would be lower than this.
“However, the third quarter (October to December, 2010) will witness pick up in growth rate, which is likely to be around 8.8 per cent,” Basu projected.
Pointing out that the medium to long term growth prospects are even “better” for the country, he explained that impulse for growth was primarily coming from the key manufacturing sector.
“Manufacturing sector is now experiencing a buoyancy rarely seen before. The impressive double digit growth rate recorded in the recent months marks the start of a new trajectory for Indian manufacturing,” Basu said.
However, he noted other key sectors of the economy like services and agriculture were currently performing below capacity.
“As these sectors return to their full capacity performance, this along with the new trajectory of manufacturing growth is likely to put India on a very good wicket for some years to come,” Basu projected.
Asked about movement of inflation in coming months with the adoption of the new series of Wholesale Price Index (WPI) he forecast the overall inflation would come down to 6 per cent by December this year.
When pointed out that under the new WPI series the inflation has come down though people at large feel that prices are rising Basu admitted that though inflation level had declined the prices had not come down.
“Fall in inflation does not mean that price has come down. What it means is that rate of rise in prices has come down,” he explained.
Explaining merits of new WPI series Basu said “the truth is that the new index gives a more accurate picture of inflation.”
DH News Service