PM's eco panel pegs GDP growth at 6.5% in FY10

Counting on the general elections to spur the sagging economy, the Prime Minister's economic advisory panel has said it expects the country to grow at 6.5 to over 7 per cent in 2009-10.      

"I expect the economy to grow by 6.5 per cent to 7 plus per cent in the current fiscal year," the Prime Minister's Economic Advisory Council (PMEAC) Chairman, Suresh Tendulkar, told PTI.      

Earlier the Council's outlook was 7-7.5 per cent for the year.      

Even the revised forecast is yet quite optimistic compared to other agencies.      

"The election expenditure will act as a big stimulus by resulting in additional purchasing power," he said, adding that the lower interest rate regime has already kicked in, which will help growth.      

A equally optimistic projection has come from the Chief Economic Adviser to the Finance Ministry, Arvind Virmani, who expects the country's economy to grow 6.5-7.5 per cent.      

Others who gave high forecasts include economic think-tank National Council of Applied Economic Research (6.5 per cent) and credit rating agency ICRA (6.5-7.5 per cent).

Almost all these forecasters have calculated their numbers assuming that the US economy will bottom out later this year and fruition of government's stimulus and good monsoon.     

While the major international lending institutions have kept their outlook for India's GDP growth in 2009 well below 6 %, even the country's central bank has cut it to below 6%.A survey of professional forecasters conducted by the Reserve Bank recently lowered its growth outlook to 5.7% from its earlier forecast of 6% for the financial year.     

The IMF, too, revised its forecast downwards to 4.5% from its prior outlook of 5.1% for India's growth in calendar 2009, which has nine months common to the fiscal 2009-10.     

While the Asian Development Bank has forecast India to grow at 5%, the World Bank's is the most pessimistic of the lot and has kept the country's outlook at 4%.

Almost all these forecasters have calculated their numbers assuming that the US economy will bottom out later this year and fruition of government's stimulus and good monsoon.      

While the major international lending institutions have kept their outlook for India's GDP growth in 2009 well below 6 per cent, even the country's central bank has cut it to below 6 per cent.      

A survey of professional forecasters conducted by the Reserve Bank recently lowered its growth outlook to 5.7 per cent from its earlier forecast of 6 per cent for the financial year.      

The IMF, too, revised its forecast downwards to 4.5 per cent from its prior outlook of 5.1 per cent for India's growth in calendar 2009, which has nine months common to the fiscal 2009-10.      

While the Asian Development Bank has forecast India to grow at 5 per cent, the World Bank's is the most pessimistic of the lot and has kept the country's outlook at four per cent.