Mr Rangarajan said the manufacturing sector is likely to grow at 4.5 per cent in FY13, stressing that a pick-up in manufacturing is expected in the second half of the current fiscal.
He said inflation figure is expected to be 6.5-7 per cent.
He said fiscal deficit is likely to be 5.06 per cent of the GDP, while current account deficit is expected to be 3.6% of the GDP.
Mr Rangarajan said economic growth for FY12 may be higher than 6.5%.
He said the electricity sector is likely to grow at 8 per cent, and the trade deficit is expected to be lower in the current financial year.
Speaking on the flatering monsoon, he said rain deficiency stands at 16%. He said rains were worse in 2009, and if rains gather momentum farm output may improve. Deficient monsoon will pull down farm sector growth rate to 0.5 per cent in 2012-13, he said.
Expressing concern over decline in the investment rate, he said it remains a cause for concern.
Mr Rangarajan also said that there is a need to okay 49% foreign direct investment in the country's ailing aviation sector.
He also said that a decline in savings rate is also a matter of concern.
Mr Rangarajan stressed on the need to contain petroleum subsidies as well as the deregulation of diesel.
He said global economy has not shown much improvement and that the financial status in the euro zone has hurt India's exports.
Talking about the worries raised due to the cut in economic outlook by various ratings agencies, Mr Rangarajan said that though some of their concerns are genuine they should also keep in mind that none of the western countries has been able to contain their fiscal deficit. He added that better fiscal deficit and current account deficit numbers will influence rating agencies. He said that all India needs to show is that it is moving in the right direction.
Following are the other forecasts by PMEAC ...
* Current account deficit seen at USD 67.1 bn (3.6% of GDP)
* Merchandise trade deficit seen at $181.1 billion
* Net balance on invisibles to grow at $114 billion (6.1% of GDP)
* Capital flows projected at $73.2 billion (3.9% of GDP).
* Domestic saving rate to be at 31.7%
* Expanding fiscal imbalance continues to be a major concern
* GST would be very important milestone in tax reform
* FDI in multi-brand retail may be allowed
* Priority consideration may be given to hike in diesel price
* Need to address apprehensions occasioned by perceptions of arbitrary actions on tax and other fronts