Economy may grow over 8% in FY11: FM

Economy may grow over 8% in FY11: FM

New Delhi: India’s economy may grow at more than 8% in the 2010-11 financial year, after growing at around 7.5% in the current fiscal year ending March, Union finance minister Pranab Mukherjee said on Wednesday.

Mukherjee also said the government’s measures to tame rising inflation will take some time to make an impact.

Asia’s third largest economy has been showing signs of a strong revival after industrial output in December surged 16.8% on year, its fastest pace on record.

“The IIP (industrial output) figures for the month of December 2009 suggest that we may end the year 2009-10 with a GDP growth rate of 7.5% and perhaps we will be able to reach 8% plus in the next fiscal," Mukherjee told reporters.

The finance minister’s growth projection for the current financial year is slightly higher than the government’s earlier growth estimate of 7.2%.

Rising inflation, particularly that of food prices, is a major challenge for the policymakers.

“I do hope over a period of few months it will be possible to have the moderate rate of inflation," he said.

India’s headline inflation in January rose 8.56%, vaulting above the central bank’s end-March inflation forecast of 8.5%.

“That (inflation) is a matter of concern no doubt and I am afraid that an 8.56% rise in WPI (wholesale price index) is disturbing."