PM's Eco Advisory Council may revise GDP forecast in January

In the wake of current global financial crisis and a sharp slump in industrial growth, the Prime Minister's Economic Advisory Council today said it may have a relook in January at the economic growth rate for this fiscal, pegged at 7.7 per cent by the panel.

"We will take another look at the gross domestic product in January when agriculture figures will be available to us," Prime Minister's Economic Advisory Council (PMEAC) Chairman Suresh Tendulkar said.

The panel chairman, however, refused to give any specific figure for possible revision. However, a member of the EAC said the panel's projection for economic growth this fiscal may be further lowered to seven per cent.

Tendulkar added that it was due to global happenings that the industrial growth fell sharply to 1.3 per cent in August. He said that it was well expected and the slowdown is expected to remain for some time.

He said in December-January, the EAC will have the agriculture performance, figures related to it and the behavior of inflation, after which the council will take a call on the GDP forecast.

Earlier this year in August, the PMEAC had lowered the GDP growth projection to 7.7 per cent during 2008-09 as against an earlier estimate of 8.5 per cent due to the global downturn. The council had also said tight monetary stance was necessary to put the economy, which grew by 9 per cent last fiscal, on the right track.

The economy clocked a growth rate of 7.9 per cent for the first quarter of this fiscal. However, sharp deterioration of industrial production to 1.3 per cent in the month of August augured too badly for the growth forecast.

Finance Minister P Chidambaram had earlier expressed optimism that India's economy would grow close to eight per cent this fiscal.