The Reserve Bank today said the economy would grow by 5 to 5.5% in the current fiscal, pinning its hopes on good farm output and improved exports.
"We have no reason to dispute the growth rate projected by the government at 5 to 5.5%," RBI Governor Raghuram Rajan told reporters after a board meeting here. He based his optimism on expectations of a good kharif crop, improvement in exports and core sector performance data. "...first estimate of kharif crop is significantly above the first estimate of last year. I think if we see some pick-up in exports...core sector is improving in performance. We would hope we would reach that range of 5 to 5.5%," he said.
India's economic growth rate slipped to a decade low of 5% in 2012-13 and declined to 4.4% in the first quarter (April-June) of the current financial year. The ADB on October 2 lowered its growth projection for India in the current fiscal to 4.7% from an earlier estimate of 6 per cent. It said the country's economy has been under pressure with the recent depreciation in the rupee and capital outflows adding to structural constraints.
The Prime Minister's Economic Advisory Council (PMEAC) scaled down its growth forecast for the current fiscal to 5.3% from 6.4% earlier. Referring to the Finance Ministry's decision to infuse additional funds in PSU banks to enable them to provide cheaper auto and consumer goods loans, Rajan said the scheme is still being worked out. "I just want to emphasise that discussion is taking place on what can be done. Something will be announced as and when the scheme will be put together," he said.