A top advisory panel expects India’s economy to gather speed in the next fiscal, but only modestly. C. Rangarajan, the head of the Prime Minister’s Economic Advisory Council, says growth will pick. But he’s added that it remains dependent on external factors like the euro zone crisis. The panel expects GDP to expand 7.5-8% during the fiscal 2012-13. Its estimate for the current fiscal year is 7.1%. Earlier, the government had estimated growth of just 6.9% in the current fiscal.
Rangarajan’s council said the recent easing in inflation will allow the Reserve Bank to loosen its monetary policy in the coming months. But it added that the government needed to rationalize the selling prices of petroleum products to cope with massive import bills and subsidy burdens. The council also said the government would need to focus on capacity addition, especially in sectors like coal, which are facing a supply crunch.
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And finally, Indian markets plunged on Wednesday, with investors rushing to book profits. The Sensex tumbled 283 points to 18,145. And the Nifty dropped 102 to 5,502.