Indian economy set to grow at 9 p.c. next fiscal

NEW DELHI, INDIA: The Indian economy is set to grow at 8.5 per cent this fiscal and 9 per cent the next year, even though the recovery globally after the financial crisis will be anaemic, the Prime Minister's Economic Advisory Council said Friday.

The council also predicted the annual inflation rate based on wholesale prices, which was estimated at 10.5 per cent for June, to fall to around 7-8 per cent by December and and further to 6.5 per cent by March next year.

"We predict the agriculture sector to grow at 4.5 per cent, industrial production at 9.7 per cent and services by 8.9 per cent this fiscal, for an overall growth of 8.5 per cent," C. Rangarajan, chairman of the council, said.

"The 4.5 per cent growth in agriculture after a decline of 0.2 per cent last fiscal is, of course, on the presumption of normal sough-west monsoon," Rangarajan, a former governor of India's central bank, said at a press conference here.

The remarks by the chief of the high-profile council comes a day ahead of the mid-term appraisal of India's 11th Five Year Plan by the National Development Council, the country's top policy forum, led by Prime Minister Manmohan Singh.

The Planning Commission, which will host the meeting, to be also attended by all state chief ministers, has already conceded that the target of 4 per cent farm sector growth during the tenure of the plan period (2007-12) will prove illusive.

Meanwhile, US Consul General Paul Folmsbee said that the Indian economy has the potential to grow further and is likely to touch the $5 trillion mark in the near future.

"The Indian economy is growing fast and from the present $1.2 trillion, it is expected to become a $5-trillion economy very soon," a PTI report quoted Folmsbee as saying.