FM downgrades the GDP forecast

An errant monsoon has cast a dark cloud over the economy’s growth prospects with finance minister Pranab Mukherjee paring the 7% GDP growth rate he had projected at the time of the Budget to a more modest ‘‘6% plus’’ on Tuesday. Independent analysts too are cutting growth projections. The finance minister, speaking on the sidelines of the Income Tax chief commissioners’ conference, said though the global economy had started stabilizing and early signs of revival were visible in the Indian economy too, ‘‘delayed monsoons have cast a shadow on agricultural growth...and may affect the overall GDP’’. He, however, expressed confidence that the impact would not be more than a percentage point and growth would be in the range of 6% plus as earlier projected by the RBI. The FM said 161 districts are drought-hit and the government is working on a contingency plan. On July 6, the FM had said, ‘‘My target is to touch 7% GDP growth this year and take it to 8% to 9% thereafter.’’ However, he had added that this would depend on a good monsoon.