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9% growth possible: Basu

February 07, 2011 14:54 IST
Encouraged by the 8.6 per cent growth rate estimated for current fiscal, Chief Economic Advisor Kaushik Basu said on Monday that 9 per cent economic growth for the next financial year is "well within target".

"The prospects for the world as a whole are looking better, although there are uncertain clouds. In that scenario, growth of 8.6 per cent is absolutely remarkable. So, the 9 per cent rate, which we are aiming for next year, is now looking well within target," Basu told reporters.

On whether the inflation would affect the growth process, Basu said: "I really don't see inflation disrupting the growth process."

On the contrary, he said, the GDP number would have a dampening effect on inflationary pressures.

"We have been concerned about inflation, but I really feel that the number we have got today is going to dampen inflationary expectation. So, I do not know how (inflation) could jeopardise the growth story."

Basu said the growth rate for the next two quarters was looking encouraging.

Notwithstanding, the 8.9 per cent growth in the first half of the current fiscal, the government is battling high inflation, particularly food inflation.

The overall inflation has remained above the comfort zone of 5-6 per cent for over a year now. The food inflation is at 17.05 per cent for the week ended January 22.

The RBI in its quarterly monetary policy review last month upped the March-end inflation projection to 7 per cent, from 5.5 per cent.

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