News

            NEW DELHI, FEB 9; THE incredible growth story of the country continues to be indicated by more facts and figures. Now, the economy has been projected to grow at a robust 7.2 per cent in 2009-10 , on the back of broad based industrial expansion, services growth and less than expected contraction in the agriculture sector.

              Advance estimates for 2009-10 released by the Central Statistical Organisation (CSO) estimates growth to be lower than the 7.5 per cent projected by Reserve Bank of india (RBI) and the more optimistic 7.75 per cent estimated by the Finance Ministry in its mid-year review, bu is still a respectable figure for a crisis year.

              The per capita income is projected to grow at 9per cent to Rs 43,749 in 2009-10 from Rs 40,141 in 2008-09.

                The Finance Secretary, Mr Ashok Chawla, said the final GDP numbers should show a growth of more than 7.2 per cent.

                “This is an advance estimate, What we normally see when the final numbers come out for the third and fourth quarters is that there is an upward bias. We are sure that this would happen this time also, ” he believed.

                  But with economic growth back on track, the government may initiate a phased with drawal of the fincal stimulus package, it is understood.

                  These growth projections for GDP, however, come on a revised base of 2004-05 One consequence of this statistical change is that the fiscal deficit, calculated on a higher national income base, may be lower.

                And with nominal GDP expected to grow by 10.6 per cent at market prices against the Budget estimate of 10.05 per cent, the fiscal deficit may fall by another  30 basis points compared to the 6.8 per cent estimated in the 2009-10 Budget.

                The fiscal deficit, as a per centage of GDP, would thus fall to about 6.1 per cent, almost touching the 2008-09 level of 6 per cent.

                The CSO data confirms what earlier was a matter of speculation that the country had clearly turned from the downturn, said the Chief Economic Advisor, Mr Kaushik Basu.

                With confirmation that the economy has turned the corner, focus is now shifting to the policy measures that are required to keep inflation under check and restore fiscal balance.

                 The planning commission Deputy chairman, Mr Montek singh Ahluwalia, indicated that the time had come for the government to wind down the stimulus, suggested the possibility that the withdrawal will be initiated as early as February 26, when the Union Budget will be presented.

                  “We should say the stimulus has succeeded and we should begin to phase it down Fiscal deficit next year would be lower than that of this year, “he said.