IMF's India growth forecast is "pessimistic":Planning Minister

Terming IMF's projection of 3.75% growth in 2013 as "pessimistic", Planning Commission today said Indian economy will grow at a rate higher than 5% this financial year.

 

"The lowering of economic growth forecast to 3.75% this year by the IMF is a pessimistic projection. The economy will grow at over 5% this fiscal," Planning Minister Rajeev Shukla told PTI.

 

Pinning hopes on better farm output and various initiatives taken by the government to speed up implementation of infrastructure projects, Shukla said: "The economic growth would improve in the coming quarters."

 

The International Monetary Fund (IMF) had lowered its projection of India's growth rate to 3.75% in 2013 from 5.7% estimated earlier due to poor demand and weak manufacturing and services sector performance.

 

 Earlier in the day, Planning Commission Deputy Chairman Montek Singh Ahluwalia refused to comment on IMF forecast. He, however, said: "I expect to see recovery in the coming quarters. Exactly how much it will produce is difficult to predict right now. But we are definitely on a turnaround path."

 

Ahluwalia said the government has taken steps to push the infrastructure sector and there are signs of improvement in the core sector production performance of steel, power, coal and cement during July and August.

 

Reeling under the impact of slowdown, Indian economy grew by 5% in 2012-13, the first year of the 12th Plan. The economic growth is expected to be flat this year. The first quarter (April-June) economic growth in this fiscal slipped to 4.4% from 4.8% the previous January-March quarter.