Montek says GDP growth to touch 8.5% this year

Seeking to dispel fears of a slowdown in the economy,Planning Commission Deputy Chairman Montek Singh Ahluwalia on Monday said GDP would grow between 8.2 and 8.5 per cent this year.

A reasonable growth target for this year would be between 8.2 and 8.5 per cent, Ahluwalia told reporters after a meeting with chief ministers of the western region on the approach paper to the 12th Plan here today. In the last fiscal,India had seen an economic growth rate of 8.5 per cent,a tad lesser than the projected figure of 8.6 per cent.

Ahluwalia said a GDP growth of even 8.2 per cent cannot be called a slowdown in the real sense and added that we should look at increasing growth in the subsequent years. The economy however,grew only 7.2 per cent in the last quarter of the previous fiscal due to continued tightening by the central bank to tame inflation.

Worries also arise from the rising crude and commodity prices and the general rise in inflationary pressures. Ahluwalia said that duty cuts on petroleum products will have a negative impact on the fiscal deficit,but ruled out any protracted effect on inflation.

The Budget pegged fiscal deficit for at 4.6 per cent,against the budget estimate of 5.1 per cent for FY11.

Keeping the oil prices low in an artificial manner would have weakened the economy and the oil sector,Ahluwalia said.

He added that the hike will have only a temporary effect on inflation and will wear off in three-four months.