Economy to grow by 7-8 per cent

Planning Commission Deputy Chairman, Montek Singh Ahluwalia is hopeful of Indian economy growing at 7-8 per cent in the next four to five years. Ahluwalia feels the economy has the potential to clock the 7-8% growth keeping in mind the past record and also the resilience shown by the economy.

Discussing the Indian economy at a panel discussion, Ahluwalia said “It will be reasonable to assume that the growth rate would be 7-8 per cent which I would call passing grade. I am reasonably confident that over this four-five year period that is going to be growth rate of Indian economy.”

However the Central Statistical Organisation has predicted the lowest growth rate of 5% for the current fiscal which is lowest in a decade.

Some analysts are of the view that the annual average economic growth rate in the 12th Plan  2012-17  would be 6.6% against the targeted 8% in the five-year policy document.

However a section of the economists while expressing concern at the slowdown in manufacturing sector feel the sector along with the automobile sector could pull down the overall economic growth.

Speaking about the widening current account deficit (CAD), Ahluwalia said  “this is a serious problem...We need to survive with CAD of over 4 per cent in next two years and efforts were needed to contain it”.

A major contributor of growing CAD is growing gold imports which amounts to $20.25 billion.