Rangarajan says second half of year will be better

Indicating a better economic outlook in the second half, Prime Minister’s Economic Advisory Council Chairman C Rangarajan today expressed optimism that the government would be able to meet the fiscal deficit target of 5.3 per cent for the current financial year.

“I think the second half will be better than the first half. We think the growth rate in the current financial year will be between 5.5 and six per cent,” he said on the sidelines of Delhi Economics Conclave here.

The former RBI governor also expressed hope there would be further improvement in growth during the next financial year. Growth in the first half of 2012-13 has fallen to 5.4 per cent, from 7.3 per cent in the same period last year.

For the entire 2011-12, the growth had declined to 9-year low of 6.5 per cent. The central bank, meanwhile, expects growth at 5.8 per cent in the current financial year.

Rangarajan said, “The average per capita GDP today is only $1,600. If we grow at eight-nine per cent, by 2025 we will reach somewhere around $10,500. It is only then when India will graduate from a low income country to middle income country.”