Growth estimate may be raised: Pronab

Chief Statistician Pronab Sen has said the projected 7.2 per cent economic growth for this financial year may be revised upwards, if the industrial production remains buoyant in the fourth quarter.

“Yes, if the high IIP growth continues... if it stays in the double digit in all the months to follow... the likelihood (of double-digit growth) is pretty good,” Sen said when asked whether advance growth estimates may be revised.

The Central Statistical Organisation (CSO), in its advance estimate, has projected 7.2 per cent growth rate for the current financial year. This is less than the 7.5 per cent forecast by the Reserve Bank of India (RBI) and 7.75 per cent pegged by the finance ministry in mid-term economic review.

Finance Minister Pranab Mukherjee and Prime Minister’s Economic Advisory Council (PMEAC) have pegged economic growth at 7.5 per cent for this financial year, compared to the 6.7 per cent in last year.

Prime Minister Manmohan Singh had also said the economy was likely to grow by 7.5 per cent this financial year.

Industrial production surged to a 16-year high of 16.8 per cent in December 2009, against a contraction of 0.2 per cent in the same month a year ago, driven by a robust performance by the manufacturing sector, particularly consumer durables.

However, the advance data for December were released before the industrial production.

Sen said the GDP projection was calculated in the advance estimate based on the relatively weak industrial output number.

“...What we have done in the advance estimate is that we projected the last quarter. That is on the strength of relatively weak IIP in the first 8 months,” Sen said.

Advance estimates are based on actual economic growth numbers for the first half, partial figures for the third quarter and total projection for the fourth quarter.