PM's council likely to peg GDP growth for FY14 at 5.5% today

Many brokerage firms and independent analysts, however, have pegged the growth rate at sub 5%

The Prime Minister's Economic Advisory Council (PMEAC) is likely on Friday to present an optimistic picture of the economy and peg Gross Domestic Product (GDP) growth close to 5.5 per cent in the current financial year.

Many brokerage firms and independent analysts estimate the growth at below five per cent. However, an official said growth might be put at around 5.5 per cent, also substantially down from the 6.4 per cent forecast by the Council earlier this year.

"I sincerely hope the growth rate will be 5.5 per cent in the current financial year," the Prime Minister had said in the Rajya Sabha two weeks earlier.

Council chairman C Rangarajan had earlier said a good monsoon would boost agricultural production, raising GDP growth, which fell to a four-year low of 4.4 per cent in the first quarter of the financial year.

"Even if you assume the non-farm sector, including industries and services, grows at the same pace as last year, the growth rate in agriculture can be anywhere between four and five per cent, which itself will give another 0.3 or 0.4 per cent growth rate," Rangarajan had said.

Agriculture grew just 2.7 per cent in the first quarter of the current financial year against 2.9 per cent in the corresponding period of 2012-13.