Eco growth in current fiscal to exceed 7.75%: FinMin

India's economic expansion could exceed 7.75 per cent during the current fiscal, helped by high GDP growth numbers recorded during the July-September quarter, the government informed Parliament today.

"The growth outlook for the next two quarters and for the whole year is likely to be in the upper bound of the range (7.75 per cent) predicted; and may exceed it", said the Finance Ministry's mid-year review tabled in Parliament.

The economy expanded by 7.9 per cent during the second quarter, beating expectations and forecasts by analysts and think-tanks.

The economic survey in July had projected a growth of 7 per cent, give or take 0.75 per cent.

The review further said that the government should observe the recovery process in major sectors, before exiting the stimulus provided to the industry to combat the impact of the global financial meltdown.

"The timing of the exit and the pace at which it should be carried out will depend on the strength of the recovery and its sustainability without fiscal stimulus", the review added.

On inflation, the mid-year review said, "The rise in prices of primary articles of consumption of the common man that has been occurring in the recent times is indeed a cause of concern, and this needs to be attended to on an urgent basis."

The review said that supply shortages in certain commodities can be met by imports, but the option may not be available for some other items like pulses, which are available in limited quantities in the international market.

"Moreover, there is always the risk that these imports will not materialise at the time of our greatest need," it said adding the solution lies in encouraging food production and increasing domestic availability of essential commodities.

The food inflation, according to the weekly data released yesterday shot up to over a decade's high of 19.95 per cent driven mainly by rising prices of vegetables and pulses.

Dismissing concerns over surge in capital flows into the country, the Review said," Inflows could be managed without significant costs or trade-offs in policy setting."

The review, however, made a case for continuing the policy of gradual, sequenced and calibrated capital account convertibility of Indian rupee.

While expressing concerns over poor off-take of bank credit, it said the Reserve Bank should exit from the easy money policy only after the recovery process is established.

"The pace and timing of exit from accommodative policy stances (fiscal and monetary), will be a major challenge going forward," it said.

Following the global meltdown, the apex bank and the government announced a host of monetary and fiscal measures to boost the economic growth that had slipped from 9 per cent to 6.7 per cent during 2008-09.