Thaindian News

New Delhi, Nov 30 (IANS) Buoyed by the 8.9 percent, better than expected growth in the second quarter, key policymakers said Tuesday that the Indian economy would perform even better in October-December quarter and the growth target for fiscal 2010-11 may be raised upward — close to 9 percent from the existing 8.5 percent.

“In the first two quarters we have grown nearly 8.9 percent. So now I can confidently say that the annual growth will not be less than 8.75 percent,” said Finance Minister Pranab Mukherjee.

Mukherjee said the Indian economy has become “remarkably resilient to both external and domestic shocks”.

“It (Indian economy) not only recovered rapidly from the global economic downturn, but also took the monsoon failure last year in its stride and is now showing robust growth,” Mukherjee said at a conference organised by the finance ministry and the National Institute of Public Finance and Policy here.

The Indian economy grew by 8.9 percent in July-September quarter, led by better than expected 4.4 percent expansion in agriculture and 9.8 percent jump in the manufacturing sector.

The country’s gross domestic product (GDP) grew 8.8 percent in the April-June quarter.

“It’s better than what I was expecting. India’s economic rebound started in the second quarter last year. So 8.9 percent growth is on a high base. In the third quarter we are expecting to do better,” Kaushik Basu, chief economic advisor to the finance ministry, told reporters on the sidelines of the conference.

Asked whether the economy will grow 9 percent in the current fiscal, Basu said: “We are very close to that. For 2011-12 we were expecting 9 percent. Now I think we will go to 9 percent sooner than what we were expecting.”

Basu said the services sector had not performed up to the expectations in the second quarter and a rebound in the sector would propel the economic growth above 9 percent.

“In services, we are still not up to capacity performance. Agriculture should do a little better in the next quarter. If services and agriculture pick up, the economy will perform much better,” said Basu.

C. Rangarajan, chairman of economic advisory council to the prime minister, said the economy was likely to grow around 8.75 percent in the current fiscal.

“We have good growth in the first two quarters. Decline in industrial output may be reflected in the growth numbers in the third quarter,” said Rangarajan, adding the overall growth was likely to remain a bit higher than the budgetary target of 8.5 percent.