The Indian economy is projected to grow at 7.5-8 per cent in the fiscal year 2012-13, said C. Rangarajan, chairman of Prime Minister Manmohan Singh’s economic advisory panel, on Wednesday.
Rangarajan said that number could go higher if global conditions turn favourable, adding that the country could end fiscal 2012 at 7.1 per cent growth rate, slightly higher than current estimates of 6.9 per cent by the Central Statistical Office.
“We might be able to achieve 8 per cent growth on our esteem ... if the world environment is favourable, we will be able to achieve high growth rate," he said at the release of the Review of Economy (2011-12).
Rangarajan, a former governor of the Reserve Bank of India, said inflationary pressures would continue to ease through fiscal 2013, projecting a 5-6 per cent rate. Headline inflation, as measured by the Wholesale Price Index will likely be at 6.5 per cent by March end in the current fiscal, he added.
For the month of January 2012, retail inflation based on Consumer Price Index (CPI) was 7.65 per cent, while WPI inflation was 6.55 per cent.
Rangarajan also stressed the need for the union government to lay out a roadmap to achieve fiscal consolidation, noting that the current account deficit has weakened and would likely be 3.6 per cent for fiscal 2012. He also said that adjustments needed to be made in the sale of refined petroleum products to reduce the large subsidy burden.