Economic growth to remain subdued in Jul-Dec: Plan panel

The Planning Commission today said the economy would grow slower in six months ending December compared to the first quarter, but Prime Minister Manmohan Singh exuded confidence that the worst of global downturn was behind and the government was equipped to handle drought.

"We have been through a difficult year because of global economic downturn which is only now coming to an end with slow return to normalcy in the months ahead," Singh told a meeting of the full Planning Commission.

The Commission, however, said that the growth rate of 6.1 per cent recorded in April-June quarter was unlikely to be repeated in the next two quarters while lowering the overall annual growth target for the Eleventh Plan (2007-12) from 9 per cent to 7.8 per cent.

The Commission, however, expects the economy to return to the growth trajectory of 8-9 per cent in the next two years, though growth in the current fiscal has been pegged at 6.3 per cent, down from 6.7 per cent in 2008-09.

Assuaging fears relating to drought, which has gripped 278 of the over 600 districts in the country, Singh said: "We should not be over pessimistic" as the government had enough food grain to tide over the difficult time.

Talking to reporters after the meeting, Planning Commission Deputy Chairman Montek Singh Ahluwalia expressed the confidence: "If drought is managed well and there is good Rabi crop as well as fiscal consolidation, inflation (of food articles) may well be contained within the comfort zone."