2011-12 GDP may be over 7: PMEAC

If industrial production picks off,I will not be surprised if GDP is more than 7: Rangarajan.

Prime Minister8217;s Economic Advisory panel chief C Rangarajan today said the economic growth rate in 2011-12 could be over 7 per cent,slightly higher than the projection of the Central Statistical Organisation.

8220;If industrial production picks off in the current quarter,then I will not be surprised if the final or revised estimate is 7 per cent or more than 7 per cent,8221; Rangarajan,who is the Chairman of the Prime Minister8217;s Economic Advisory Council,said here.

His comments came after the CSO,in its Advanced Estimates,said the economic growth is likely to fall to a three-year low of 6.9 per cent in 2011-12.

This,it said,was mainly due to sharp slowdown in manufacturing,agriculture and mining sectors,against 8.4 per cent expansion in the last fiscal.

8220;The numbers in Advanced Estimates are below 7 per cent but my expectation is that when the final estimate comes it will be more than 7 per cent for this fiscal,8221; Rangarajan said.

As per the data,agriculture and allied activities are likely to grow at 2.5 per cent in 2011-12,compared to a robust growth of 7 per cent in 2010-11.

Manufacturing growth is also expected to drop down to 3.9 per cent in this fiscal from 7.6 per cent last year.

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The CSO8217;s GDP growth projection is a tad lower than the 7 per cent forecast made by the Reserve Bank of India in its quarterly monetary policy review last month.

In its mid-year Economic Review,the government had pegged growth at around 7.5 per cent. The current estimate is sharply lower than the 9 per cent growth projection for 2011-12 made by the government in its pre-Budget survey in February last year.

The latest GDP growth estimate of 6.9 per cent for the entire fiscal means the pace of economic expansion has slowed in the second half of 2011-12,given that GDP growth in the April-September,2011,period stood at 7.3 per cent.

According to the advance estimates,mining and quarrying is likely to witness a decline of 2.2 per cent,compared to a growth of 5 per cent in the previous year.

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Growth in construction is also likely to slip to 4.8 per cent in 2011-12,against an 8 per cent growth in 2010-11.

The government and the RBI had earlier said that global economic slowdown and the high domestic interest rate regime is likely to act as a dampener in growth during the current fiscal. However,the 6.9 per cent growth projected in the advanced estimates is lower than what experts have been forecasting.

The Indian economy had expanded by 8.4 per cent in both 2010-11 and 2009-10,while growth in 2008-09 was 6.7 per cent.