Rebutting the forecast of Indian Monetary Fund (IMF), which has sketched murkier picture of India's economic growth rate to below 5% from earlier prediction of over 6%, the Indian plan panel has express hope for better future.
Indian economy can grow better than earlier expected from 5.6 percent to 7.5 percent in this fiscal which was predicted by the Asian Development Bank (ADB) on the basis of India's strong fundamental, said Planning Commission Principal Economic Adviser Pronab Sen by adding that it is possible if investment picks up.
"Six percent growth is easy in the current fiscal. We may clock more than 7 percent. The growth rate may even be 7.5 percent," Sen told reporters on the sidelines of an event organised by the ICFAI Group of deemed universities here Monday evening.
"My personal view is that our quarterly gross domestic product (GDP) estimates tend to underestimate growth a little bit because it does not capture adequately the small scale industry," he said.
"When the revised figures come in on the quarterly results, we will see it will go up to 6 percent from the present 5.5 percent," he pointed out, refering to quick estimates of national income released by the Central Statistical Organisation (CSO) recenty.
His comments came in the wake of ADB cutting its gross domestic product (GDP) growth estimates for India to 5.6 percent from around 7 percent recently, citing weaker consumption demand, persistently high inflation and a large fiscal deficit.
The country posted 6.5 percent growth in 2011-12, which was the lowest in nine years. Revealing a persistent sluggishness in the economy, the growth in the first quarter (April-June) of 2012-13 was 5.5 percent.
According to Sen him, industry has already witnessed certain positive impact largely due to Prime Minister Manmohan Singh government re-starting multiple reforms with some key decisions on foreign equity in multi-brand retail, insurance and pension.
He said the announcements have lifted industry mood and market sentiments that should prompt India Inc to go for public issues, even as government's own divestment programme will re-start.
"The main problem we have is a sharp decline in corporate investments. So, investment demand is down. With these reforms, if the corporate investments pick up, then yes, the growth will be a lot better," he said.
"Six to eight months down the line, you can start see the activity on the ground."
--With IANS Inputs--
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