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| India to grow at least 7% this fiscal: Suresh Tendulkar |
| Press Trust of India / New Delhi Oct 07, 2009, 16:58 IST |
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The Indian economy would grow at least 7 per cent in the current financial year, according to Suresh Tendulkar, former chairman of the Prime Minister's Economic Advisory Council (PMEAC).
"Clearly, there is a problem about monsoon. But other sectors, services and manufacturing, are showing signs of improvement. I think, we should be able to clock at least 7 per cent," he said on the sidelines of a function hosted by the SME Chamber of India.
Tendulkar believes inflation would stay in the "comfort range of 5 per cent or less" by March-end.
He declined to predict the time RBI would exit from its soft monetary stance, saying it is "a dicey proposition" in the face of uncertainties.
Tendulkar's forecast on India's economic growth is rather optimistic compared to the predictions of 6.3 per cent made by the Planning Commission, and over 6 per cent by the Reserve Bank of India.
However, the Finance Ministry's Chief Economic Advisor Arvind Virmani expects a growth of 7 per cent. And on Monday, Planning Commission deputy chairman Montek Singh Ahluwalia eliminated the downside possibility of the commission's forecast.
While several economists expect the Central bank to start hiking key policy rates from early next year, Tendulkar said: "For supply side inflation, monetary policy is not the solution. Monetary policy is too blunt an instrument for supply-side inflation."
Instead, he feels expanding the supplies is the best alternative and the monetary policy should be used as the last resort, as "it restricts demand and restricting demand is bound to affect growth".
Tendulkar expects food pirce-induced inflation could be partially mitigated with a good Rabi harvest, ample foodgrain stock and boosting the stock through imports.
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