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The Finance Ministry has admitted that the 9 per cent GDP growth forecast for 2011-12 made by it in February is unlikely to be achieved. This comes even as it plans to undertake an interim review of its economic growth forecast for 2011-12 by the middle of next month.
A rush of forecast downgrades by various domestic and foreign economic think-tanks in recent weeks is said to have influenced the Ministry to go in for a stock-taking in mid-September in addition to its usual mid-term review to be tabled in Parliament in November. In February, the Government had forecast GDP growth of 9 +/- 0.25 per cent during 2011-12. But sluggish industrial growth and spate of policy rate hikes by the RBI to tame inflation has raised doubts on the country registering 9 per cent growth in the current fiscal.
“This year we will have an interim review in September. Normally, we would have done that only in November as part of our mid-year review. On the whole, it won't be the 9 per cent GDP growth we were forecasting earlier in February this year,” Dr Kaushik Basu, Chief Economic Advisor to the Finance Ministry, said on the sidelines of the Exim Bank IEDRA 2010 award function here on Tuesday.
Stating that he was more optimistic than many forecasters, Dr Basu said that he “continued to be on the upper end of the various forecasts that he was seeing all around”. In the recent months, economic growth forecasts have ranged between 7.8 per cent and 8.5 per cent by various organisations and multilateral bodies.
Dr Basu said that the Finance Ministry will wait for the Central Statistical Organisation to come up with the first quarter GDP growth estimate on August 31 before embarking on the exercise of an interim review.
krsrivats@thehindu.co.in
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