New Delhi: The Prime Minister’s Economic Advisory Council (PMEAC) on Monday projected the economic growth in the country at 8.6% for the current fiscal on the back of rebound in farm output and inflation to come down to 7% by March-end due to declining food prices.
The PMEAC, in its ‘Review of the Economy 2010-11’ report released on Monday, also said the country’s GDP is likely to grow by 9% in 2011-12, back to the high rate it had witnessed before onset of the global economic recession.
PMEAC’s projection of 8.6% growth is in line with government estimates released earlier this month.
According to PMEAC, the agriculture sector is expected to grow at 5.4% this fiscal.
This is higher than the 0.4% rate of growth registered by the farm sector in 2009-10.
“Agriculture will do very well this year. We might have record harvest of wheat,” PMEAC chairman C. Rangarajan said here.
The council also said the services and industry sectors would maintain the high growth rate of last few years.
While services is expected to register a growth rate of 9.6%, industry is projected to grow by 8.1%.
During the last fiscal, services sector had witnessed a growth of 9.1%, while manufacturing had grown by 8.8%.
The PMEAC further said the overall inflation is expected to be at 7% by March-end and that the rate of price rise in the case of manufactured goods has been low.
“The declining trend in food prices, particularly that of the vegetables, will result in lower food inflation... considerable care from the policy side has to be taken to ensure that the manufactured goods inflation remains below 5% in 2011-12,” it said.
The overall inflation for January has been at 8.23%, while food inflation was at 11.05% in the first week of February.