Economic growth seen at 5.5% for FY'15

The  finance ministry on Friday pegged economic growth at around 5.5 per cent for the current financial year, after two years of successive sub-5 per cent economic expansion.

The projections, contained in the Mid-Year Economic Review, tabled in Parliament, came at a time when industrial production plunged a three-year low f 4.2 per cent in October. 

The economy also rose 5.5 per cent in the first half of the current financial year, and hence the projections of the Review , penned by chief economic adviser Arvind Subramanian and his team, implied that the government does not believe the expansion to gather pace in the second half. 

The projections are same as of the Reserve Bank of India broadly,  but towards the lower side of a wide range given in the Economic Survey. The Survey had pegged the growth at 5.4-5.9 per cent. 

RBI had forecast growth to be 5-6 per cent, with a mean of 5.5 per cent.   

The Review said investment is yet to pick up significantly, but inflation has come down dramatically.

However, it pegged retail price inflation to be bit higher in the range of 5.1-5.8 per cent in next five quarters.

The RBI has targeted CPI inflation to be 8 per cent  by January 2015 and 6 per cent by 2016, and anchoring it at 4 per cent plus, minus two per cent subsequently. 

The review pegged the current account deficit at around two per cent of gross domestic  product, stating that higher gold imports will be offset by slump in oil prices. 

Gold  imports rose by over 500 per cent in November.