Industry could grow close to 10% this fiscal: Montek

Industry could grow close to 10% this fiscal: Montek

New Delhi: The government on Friday exuded confidence that industrial output would be close to 10% this financial year as it welcomed the return of double-digit growth in the sector during October.

“I hope that it (IIP growth rate) would be close to 10% but it may not actually get to 10%", Planning Commission deputy chairman Montek Singh Ahluwalia told reporters here.

After a gap of two months, the Index of Industrial Production (IIP) recorded a double digit growth of 10.8% in October.

Having recorded an increase of 15.08% in July, IIP slipped to 6.91% in August and further to 4.4% in September.

“We have to wait and see whether this (high IIP) growth is maintained in the remaining months of the year because this is the period last year when growth picked up.

“There could be base level effect so the growth rate could be lower compared to same months last year", Ahluwalia said.

As regards the economic growth during the current fiscal, he said, “the 8.5% (GDP growth) would definitely be achieved, it could be little higher. But we are not giving precise forecast on that".

The economy during the first half of the current fiscal recorded an increase of 8.9%, raising hopes that the fiscal might witness economic expansion of 9%, up from 7.4% in 2009-10.

Asked about the need to provide further stimulus to fuel growth momentum, he said, “This is not the occasion when stimulus (should be given)...when economy is growing at 8.5%."

“It is very difficult to say that you need stimulus... of course you need policies which retain this growth momentum".

Although economy is doing very well on the growth front, inflation is still high, Ahluwalia said, adding the government will have to keep a vigil on it.

“Growth is doing very well. Things are improving on inflation, but in the present situation inflation is still high. We cannot relax vigil on inflation", he said.