Economic advisory council predicts 6.75% growth rate

According to the report submitted by Prime Minister’s Economic Advisory Council, the country’s economy may grow by 6.75 per cent this year despite bad monsoon affecting agricultural sector output. On-going global financial crisis and impact of drought on the country’s agricultural output are the key factors influencing growth. India’s economic growth slowed down to 6.7% during
2008-09 from over 9% recorded in the previous three years on account of global financial meltdown.

On the inflation front, the council presents a murky picture and predicts inflation rate to reach 6% by March 2010. PMEAC Chairman C. Rangrajan finds rising inflation possibilities due to increasing food prices.

The Council also stresses on the need to bring down the high fiscal deficit which is projected to be 10.1 per cent. This figure also includes the fiscal deficit of states. It also warns about the long term perils of the high fiscal deficit.

PMEAC also advocated to continue the current monetary policy till March 2010 to support the economic recovery from the throes of the economic crisis.