Thaindian News

New Delhi, Feb 21 (IANS) India’s economy was likely to grow by 8.6 percent in 2010-11 on the back of robust agricultural growth, rising output in services sector and stable industrial production, the chairman of the prime minister’s economic council said Monday.”The overall growth rate of 8.6 percent is likely to be achieved,” said C. Rangarajan, chairman of the economic advisory council to the prime minister while releasing the Review of the Economy in 2010-11.

The central statistical organisation had recently indicated in its advance growth estimates that the country’s gross domestic product could grow by 8.6 percent.

“Agriculture has done well this year. But you will also recognise the fact that the strong growth rate in agriculture of 5 percent plus comes on top of somewhat poor agricultural performance in the two previous years.”

Rangarajan. however. said that a dip in manufacturing output in the November and December indicated that growth in the sector could be flat in the last quarter of the current fiscal, resulting in a dampening effect on the economy.

The former Reserve Bank of India governor said industry on a whole could grow by 8.1 percent, and pegged manufacturing output at 8.8 percent for the current fiscal.

“The somewhat slower rate of growth in manufacturing in the last few months, for which data are available, would indicate that the industry growth rate may be lower but it can be compensated to some extent by the better performance of the mining sector and services sector,” he added.

Growth in the services sector could be much stronger and was likely to grow by 9.6 percent, helped by a good performance in the first half of 2010-11.

Exports in the year, according to the balance of payment data, could touch $230 billion and the imports could be the order of $362 billion, he added.