In spite of the lagging global economy, analysts believe that India could experience economic growth to the tune of 8% in the coming fiscal year.
A leading government panel in India is looking at Indian growth with an optimistic eye even though Asia’s third largest market lost some of its momentum as a response to the 13 hikes in interest rates by the central bank since March 2010 as a way to control runaway inflation. Today what was close to double-digit inflation is down to 6.5 percent, its lowest rate in 26 months.
"We might be able to reach a growth rate of eight percent" in the next fiscal year to March 31, 2013, said C. Rangarajan, head of the Prime Minister's Economic Advisory Council, putting the range at between 7.5 and eight percent.
The coming year should see inflation staying in the vicinity of 5 to 6 percent.
"But to get back to nine percent growth we need a more hospitable global environment," Rangarajan said. "Until the global environment clears, we should be able to achieve eight percent (annual) growth."
The government is desperate to see an Indian growth rate close to 9 percent, the minimum they see as a way to meaningfully reduce the devastating poverty which is the scourge of hundreds of millions of Indian citizens.
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