Print this article

Govt pegs GDP growth at 7.5%

Last updated on: December 9, 2011 14:37 IST

A labourer works on reinforcing bars at a construction site to build a bridge.

Citing global and domestic reasons, the government on Friday lowered the GDP forecast for the current fiscal to 7.5 per cent from 9 per cent, but exuded confidence of a revival in the next year.

"The analysis of several data series and simple macro-econometric modeling lead us to forecast GDP growth of 7.5 per cent (plus/minus 0.25 per cent) during 2011-12," the government said in the Mid-Year Analysis 2011-12 tabled in Parliament.

Click NEXT to read more...

Govt lowers GDP growth forecast to 7.5 per cent

Last updated on: December 9, 2011 14:37 IST

Workers stand beside the stacked containers in Rajasthan.

Compounding with domestic factors like decline in industrial production, the global situation has led to a clear slowdown in the growth rate in the first half of 2011-12 to 7.3 per cent from 8.6 per cent year-on-year, it said.

"We expect some revival next year but the outlook remains mixed. If Europe slides into proper recession, with all the attendant financial contagion that will no doubt affect other nations, the entire world economy will slowdown and we could also be impacted," it said.

Click NEXT to read more...

Govt lowers GDP growth forecast to 7.5 per cent

Last updated on: December 9, 2011 14:37 IST

Indian currency notes are stapled to form a garland at a shop in Jammu.

The analysis, however maintains that with India's strong fundamentals, and if Europe and the US remain stable, it should be possible for the country to achieve 9 per cent growth in the long run.

On high rate of price rise, the government expects that with demand side pressure moderating following withdrawal of fiscal stimulus and tightening of credit, overall WPI inflation is likely to decline December onwards.

Click NEXT to read more...

Govt lowers GDP growth forecast to 7.5 per cent

Last updated on: December 9, 2011 14:37 IST

A man rides on a horse-drawn cart in a brick factory on a cold winter morning at Togga village.

"...the current fiscal may end with headline inflation of around 7 per cent," it said.

It further said "maintaining the growth momentum in the economy with price stability is one of the biggest policy challenges that India is facing in recent times," the analysis tabled by Finance Minister Pranab Mukherjee in Lok Sabha said.

Click NEXT to read more...

Govt lowers GDP growth forecast to 7.5 per cent

Last updated on: December 9, 2011 14:37 IST

A man rolls electrical power lines onto a wooden wheel at a factory in the outskirts of Jammu.

In the mid-year review, the government, however, said it expects improvement on price front. But it will depend on strong measures to boost supply side of food and agriculture and remove bottlenecks.

Expressing concern over slow pace of moderation of headline inflation, the government said it has started easing and the decline is expected to continue.

Click NEXT to read more...

Govt lowers GDP growth forecast to 7.5 per cent

Last updated on: December 9, 2011 14:37 IST

A worker assembles a Hyundau i10 car at a plant of Hyundai Motor India Ltd in Sriperumbudur.

The average wholesale price inflation during April-October 2011 was 9.6 per cent as compared to 9.9 per cent in the same period last year.

It further said the Centre's fiscal policy for 2011-12 remains on the consolidation track, even though there may be a small transgression this year.

"There can be no denial that meeting the target will not be easy this year. The government is, however, determined to keep overshooting fiscal deficit target of 4.6 per cent to as minimal as possible," the review said.