'Growth rate will be better than last year's'

The Prime Minister’s Economic Advisory Council chairman C Rangarajan, on Friday said the overall growth rate for the current year could be slightly better than last year’s 6.5 per cent. According to him, industrial production should pick up in the second half of the year and the contribution to GDP from agriculture activities will also be higher.

“The Economic Advisory Council will come out with its outlook on the current year’s growth rate within the next couple of weeks, But at the present moment, our estimate is it can be a shade better than last year,” Rangarajan told reporters here in the light of the slide in industrial production numbers.

“I don’t think so,” he said, to a question on whether the country’s economic growth rate was going to be lower than last year’s with some rating agencies even estimating a 5.5 per cent rate. He said the agencies had taken a very pessimistic view.

“Industrial production will certainly show a rise in the second half of the current year, partly because of the base effect, as industrial production had slowed significantly in the second half of last year. Though agricultural production may suffer during the year, the GDP growing from agriculture activities may show some slight increase, rather than decrease. So, overall, the growth rate can be slightly better than last year’s,” he said.

Responding to a question, he said the Planning Commission had to take a reassessment on the growth targets made for the 12th Five Year Plan.

“The first year of the 12th Plan will fall very much below the targeted growth rate for the five-year period. So, they will have to take a reassessment as to what has been lost in the first year can be made up by the performance of the subsequent years.”

“It has been estimated only if we grow at nine per cent per annum, India’s per capita GDP will increase from the current level of $1,600 to $8,000-10,000 by 2025. Achieving and sustaining a high growth rate require action on several fronts, including technology upgradation,” he added.