The Finance Ministry today said the growth rate in the current financial year will accelerate to 5.8 per cent, better than previous estimates, saying the green shoots of economic recovery are now visible.

“I am very confident that we will achieve somewhere close to 5.8 per cent... If we see the trend growth, then we will see there are green shoots of recovery in the economy,” Finance Secretary Arvind Mayaram said at an Assocham event.

The Reserve Bank has projected the GDP growth for 2014-15 fiscal at 5.5 per cent and the Economic Survey had pegged the growth at between 5.4-5.9 per cent.

The GDP growth had slumped to 4.7 per cent last fiscal.

“The Budget for current fiscal has very strong growth impulses,” Mayaram said, adding that industrial output and passenger vehicle sales are showing signs of revival.

“There is clearly visible sign that infrastructure is picking up,” he said, adding, corporate order book is building up.

He hoped that the Reserve Bank of India would not hold interest rates high for longer than necessary as inflation is showing signs of deceleration.

“We see inflation is going to come down further and we hope that as he Governor in the recent credit policy stated, RBI will not hold interest rates high any longer than is necessary and I hope that threshold we will reach soon now,” Mayaram said.

The WPI inflation dipped to a five month low of 5.19 per cent in July, while the retail inflation was at 7.96 per cent.

Mayaram said with softening of oil prices, the prices of diesel will soon become market driven.

“We have been lucky on oil. And if you see the oil prices which have been softening, I think that we will be able to exit the diesel subsidy soon enough and diesel is going to become market price,” he said.

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