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While hoping for a 7-7.5 per cent growth rate in the current fiscal, Dr C. Rangarajan, Chairman of the Prime Minister's Economic Advisory Council, expects Standard & Poor's to reverse and even upgrade India's long-term credit outlook.
This week, the US rating agency had revised India's outlook from stable to negative, while reaffirming its BBB- rating. It also warned of a downgrade in two years if there was no improvement in the fiscal situation and political climate.
India's economic growth in the previous fiscal is estimated to have slowed to a three-year low of 6.9 per cent.
At the sidelines of an American Chamber of Commerce event here on Friday, Dr Rangarajan said, “The rate of growth should hover around 7-7.5 per cent as inflation in the current fiscal will be significantly lower leading to easing of monetary policy.” He said inflation should be around 6.5 per cent in the current year.
Dr Rangarajan said some adjustments need to be made to administered petroleum prices in line with high global crude prices.
He said the Government would make efforts to contain fiscal deficit at the budgeted level of 5.1 per cent and was optimistic about the economy's potential to grow at 9 per cent as savings and investment rates would improve.
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