News Hour- GDP growth seen at 7.6% in 2012-13: Kaushik Basu

Kaushik Basu

NEW DELHI: India's economy will likely grow 7.6 per cent in the fiscal year 2012-13, Kaushik Basu, chief economic adviser in the finance ministry, said on Thursday. "India should continue to aim to bring down debt-GDP ratio," he said. 

The economy probably grew 6.9 per cent in the previous fiscal year, its slowest in three years. 

Basu said that the volatility of the Indian rupee was a big concern and that the government was watching it closely. He further added that a possible break up of the eurozone will have a big impact on the Indian economy. 

Echoing the same sentiment, Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission on Thursday said that the prospects of a 9% economic growth are clouded right now. Ahluwalia was of the opinion that a structural change was necessary for high growth. 

Last week, Finance minister Pranab Mukherjee said reversal of policy rates will help revive investments and boost business sentiments and the government was committed to keeping subsidy at below 2% of GDP in current financial year. 

The Indian economy is more resilient than many other nations to withstand this fresh round of global economic turmoil, as the bulk of India's GDP is domestic demand driven, he said according to an official statement. 

Sharing concern over the slow pace of key reforms in India, Mukherjee said that delays are inevitable in a coalition-run government as it has to take on board views of different ruling partners and the process is time-consuming. 

However, to boost business sentiment, the government has taken major initiatives like the new investor-friendly manufacturing policy, liberalisation of inflows in the capital market and easing of the rules for the companies to raise funds overseas, he said. 

Significantly, Mukherjee said, "Discussions are also underway about decontrolling some of the administered fuel prices".
(Source- http://economictimes.indiatimes.com)