New Delhi: India's economic growth is likely to cross 9 per cent in the current fiscal on the back of better than estimated 8.9 per cent expansion in the first two quarters, Finance Minister Pranab Mukherjee said in a mid-term analysis of the economy for fiscal 2010-11.
"Growth rate for the fiscal 2010-11 will be 8.75 per cent plus minus 0.35 per cent. In the first two quarters we have grown 8.9 per cent. That is quite encouraging," Mukherjee told reporters after tabling the mid-year analysis of the economy in both houses of parliament Tuesday.
India's gross domestic product (GDP) grew 8.8 per cent and 8.9 per cent in the first and second quarter respectively beating the budgetary estimate of 8.5 per cent.
"This growth is also broadly based, with recovery in all three sectors, agriculture, industry and services, and in private consumption and investment. Abundant late rainfall is boosting agriculture," according to the mid-year analysis document tabled in the parliament.
"All indicators therefore portend well for output growth crossing 9 per cent for the entire fiscal year 2010-11, although some risks remain in the global economy which widens the band of expected growth outcomes (plus or minus 0.35 per cent around a revised projection of 8.75 per cent; up from a baseline level of 8.5 per cent plus-minus 0.25 per cent projected in the Economic Survey 2009-10."
Terming inflation a big concern, the finance minister said it was likely to come down to six per cent by the end of the current fiscal.
"Inflation is coming down. Now it is in the single digit but I would like further easing. I am hoping that by March it will be around 6 per cent. But it should come down further," said Mukherjee.
India's annual rate of inflation based on wholesale prices declined to 8.58 per cent in October from 8.62 in the previous month.
The annual food inflation dropped to a four-month low of 8.6 per cent for the week ended Nov 20. Moderating food inflation may give some comfort to the policy makers. However, it is still much above the central bank's comfort level despite an aggressive tight money policy since January.
The apex bank had hiked both its short-term borrowing and lending rates by 25 basis points each Nov 2, tweaking its policy rates for the sixth time since the start of this calendar year to curb inflationary expectations.
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