News: Indian economy to grow by 7.5-8% in 2006-07
(IANS 18/04/2006) Mumbai - India's economy is likely to expand between 7.5 and 8 per cent in the current fiscal year on a sustained growth in farm and industrial production, the Reserve Bank of India (RBI) said on Tuesday.
India's economy grew by a robust 8.1 per cent in the fiscal year ended March 31, up from 7.5 per cent the previous year.
The central bank said in its annual policy statement for 2006-07 that inflation would be contained within 5-5.5 per cent in the current fiscal ending March 2007.
"The recovery in agriculture, alongside the sustained momentum of growth in industry and services, augurs well for the Indian economy," said RBI governor YV Reddy while unveiling the policy.
"There is a gathering confidence that the economy is possibly poised on the threshold of a structural step up in the growth trajectory.
"The containment of inflation and particularly inflation expectations has boosted growth prospects in an environment of stability and confidence."
On downside risks to the economic outlook, the central bank said sustaining the growth of manufacturing, the key driver of industrial recovery, would depend critically on bridging large gaps in the physical infrastructure.
Getting infrastructure right will hold the key to achieve the growth targets in fiscal 2006-07 and 2007-08, assuming that the global economic environment remains conducive, said the policy statement.
"Fiscal policy will obviously have to play a key role in improving the delivery of infrastructure services, in fostering public-private partnerships and in crowding in private investment," it said.
Progress in fiscal consolidation will also be a key factor in achieving higher growth, said the RBI.
The larger market-borrowing programme of the government envisaged for the current fiscal year will have to be managed in the context of the overall liquidity situation and, particularly, the conditions in the debt market.
India's economy grew by a robust 8.1 per cent in the fiscal year ended March 31, up from 7.5 per cent the previous year.
The central bank said in its annual policy statement for 2006-07 that inflation would be contained within 5-5.5 per cent in the current fiscal ending March 2007.
"The recovery in agriculture, alongside the sustained momentum of growth in industry and services, augurs well for the Indian economy," said RBI governor YV Reddy while unveiling the policy.
"There is a gathering confidence that the economy is possibly poised on the threshold of a structural step up in the growth trajectory.
"The containment of inflation and particularly inflation expectations has boosted growth prospects in an environment of stability and confidence."
On downside risks to the economic outlook, the central bank said sustaining the growth of manufacturing, the key driver of industrial recovery, would depend critically on bridging large gaps in the physical infrastructure.
Getting infrastructure right will hold the key to achieve the growth targets in fiscal 2006-07 and 2007-08, assuming that the global economic environment remains conducive, said the policy statement.
"Fiscal policy will obviously have to play a key role in improving the delivery of infrastructure services, in fostering public-private partnerships and in crowding in private investment," it said.
Progress in fiscal consolidation will also be a key factor in achieving higher growth, said the RBI.
The larger market-borrowing programme of the government envisaged for the current fiscal year will have to be managed in the context of the overall liquidity situation and, particularly, the conditions in the debt market.
posted by InCar Group Press Room at 12:48
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