Brushing aside IMF and World Bank’s dismal projection of India’s GDP growth, PM's Economic Advisory Council chairman C Rangarajan expressed optimism that growth would touch 5%-5.5% this year.
“In the current year, the growth rate will be around 5%- 5.5%. I know that several international agencies have forecast numbers that are below this number. However, I continue to maintain that it will be 5.3%,” he said
The International Monetary Fund (IMF), in its latest World Economic Outlook, projected an average growth rate of about 3.8 percent in market prices for India in fiscal 2013, while the World Bank in its report pegged growth at 4.7% as against 6.1% projected in its April forecast.
Rangarajan pointed out that monsoon has been good this year leading to rise in agricultural production and pick up in rural demand. The good monsoon will also lead to improved exports figures, he explained.
While agri sector has got the necessary boost from a good monsoon this year, Rangarajan feels the manufacturing sector too will perform better in the second half of the financial year improving the overall economic growth scenario. “The government has taken a lot of measures in the past few months and it will have a positive impact on the manufacturing sector in the second half of the fiscal and there is also a constant effort to push the stalled infra projects. Hence I see the manufacturing sector doing better than what it has performed earlier,” he added.
On current account deficit (CAD) situation, he said, “The exports have been good and the CAD during the April-September period has turned out to be $10 billion lower than the last year. We at the economic advisory council have projected that the CAD will come down from $88 billion to $70 billion this year, hence it will be 3.8% of the GDP this year from the 4.8% of the GDP last year. Perhaps, it may even come down to 3% of the GDP.”