Growth robust at 7.4,RBI likely to raise interest rates

Higher growth rates across sectors have propelled overall growth rate of the economy to levels higher than anticipated in 2009-10. The Gross Domestic Product grew at a robust 7.4 as against the advance estimate of 7.2 made by the Central Statistical Organisation earlier this year. GDP grew at 8.6 in the last quarter,the fastest in the last six months.

The government now expects the economy to move on a high growth path,and it is likely the Reserve Bank of India will follow a tighter monetary policy to rein in inflation. Key interest rates could go up by 75 basis points in this financial year.

The economy has shown robust growth,higher than what was expected. Agriculture seems to have done well. In case,agriculture growth is normal during the current fiscal as well,then the economy is likely to grow closer to 8.5 per cent, said C Rangarajan,chairman of the Prime Ministers Economic Advisory Council.