Economic think-tank pegs FY10 GDP at 7.5 percent

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SME Times News Bureau | 18 Jan, 2010
The economic growth of the country during 2009-10 may touch 7.5 percent - slightly lower than the projections of Finance Minister Pranab Mukherjee - buoyed by strong industrial growth, said a leading economic think-tank on Sunday.

"Growth of 7.5 percent possible is during 2009-10 as manufacturing is doing well," Centre for Monitoring Indian Economy (CMIE) chairman SA Dave was quoted to say by a news agency in Panjim, Goa.

Recently, the Finance Minister pegged the GDP growth at 7.75 percent for this fiscal. In its mid-year review, the government too had projected a growth of around 7.25-7.75 percent for the fiscal. The Government, in its mid-year review, too had projected a growth of around 7.25-7.75 percent for the fiscal.

Dave further added the GDP could grow higher in the next financial year.

On Friday, the multilateral lending agency Asian Development Bank had said India was poised for a strong recovery this year bu the country need must address rising inflation and widening fiscal deficit to insulate itself against future shocks.

"India’s economy is poised for a solid recovery in 2010 as the global financial crisis fades, but policymakers need to address inflation and the widening fiscal deficit to buffer it against the impact of future global shocks," ADB said.

The country's inflation has risen to 7.31 percent in December against 4.78 percent in the previous month while fiscal deficit is projected at 6.8 percent of GDP for the current fiscal.

The Indian economy, adversely affected by the global financial crisis, grew by 6.7 percent in the last fiscal and by 6.1 percent in the first quarter of the current fiscal. However, the economy registered a better-than-expected growth of 7.9 percent in the second quarter of the current fiscal.