Economy to clock up to 9.4% growth in June qtr: experts

Unfazed by partial rollback of stimulus, the Indian economy is likely to clock a growth rate in the range of 8.9 per cent to 9.4 per cent in the first quarter of this fiscal, almost the pace recorded three years back, say experts.

The economic growth data for the first quarter is scheduled to be released on Tuesday.

The economy, which had expanded 8.6 per cent in the previous quarter, was the second fastest growing large economy after China, which had registered a growth of 11.9 per cent in the March quarter.
    
In the corresponding period last fiscal the Indian economy grew at a slower pace of 6 per cent.
    
"The April-June quarter is likely to see an economic growth of 9.4 per cent on the back of low base last year. The quarter will the best performing in the current fiscal as growth will moderate going forward on high base," Yes Bank Executive Vice President & Chief Economist Subhada Rao said.
    
Experts attributed the likely high growth to industrial sector, particularly manufacturing. The industrial output in the April-June quarter of current fiscal was 11.6 per cent.
    
Experts said a strong industrial growth will be complemented by good services and farm sector output which will make June quarter growth the best in the fiscal.
    
"We expect agriculture growth to come in at 3.2 per cent, arising out of rabi harvest and foodgrain procurement. For services, we project a growth of 9.5 per cent," Axis Bank Chief Economist Saugata Bhattacharya said.
    
He added that the June quarter growth would come in at 8.9 per cent.
    
In the June quarter of FY'10, the agriculture growth was 1.9 per cent and services growth was at 7.5 per cent.
    
"I see the June quarter growth coming in at 9 per cent. industry will be the outperformer and farm sector will see good output on normal monsoon," Crisil Chief Economist D K Joshi said.
    
Economists believe the overall economic growth for fiscal 2011-11 is expected to be upwards of 8.5 per cent. Finance Minister Pranab Mukherjee has projected an economic growth of 8.5 per cent for the current fiscal.
    
"We expect the FY'11 growth to be at 8.8 per cent," Yes Bank's Rao said.
    
While projecting an 8.7 per cent growth for FY'11, Axis Bank's Bhattacharya said, there could be a deceleration in industrial activity on high base and tight liquidity ... "this could impart a downward bias to this number."

GDP growth slowed to 6.7 per cent in 2008-09 from nine per cent in the previous three years due to global financial meltdown. However, government's stimulus packages and stepped- up public spending pushed growth to 7.4 per cent in FY'10.
    
The government has partially rolled back stimulus by raising excise duty by two per cent to ten per cent. The first quarter economic growth would reveal whether partial removal of stimulus has affected the economy or not.