FM maintains economic growth may be close to 9 pc this fiscal

Finance Minister P Chidambaram has expressed "some disappointment" at the lower than anticipated economic growth projections by CSO, but exuded confidence that the GDP may finally grow close to 9 pc in the current fiscal.

"There is some disappointment, but I am not too despondent. I am pretty confident that we may achieve economic growth rate of close to nine per cent," Chidambaram told reporters after the Central Statistical Organisation put out advance estimates of economic growth rate of 8.7 percent this fiscal against 9.6 percent in 2006-07.

Attributing the projected moderation in economic growth rate this fiscal to lower estimates of agriculture expansion, Chidambaram said the Ministry of Agriculture did not share figures put out by CSO.

The CSO estimates have projected agriculture to grow at 2.6 percent during the current fiscal.

In the first half of the year, farm and allied sector grew at 3.7 percent.

"I have spoken to the Ministry of Agriculture. It did not share the assessment that the growth rate in agriculture for the whole year would only be 2.6 percent," Chidambaram said.

Meanwhile, according to a press note issued by the Agriculture Ministry on Thursday, foodgrain production in the country is estimated to be at an all time high of 219.32 million tonne during 2007-08.

"It could, therefore, turn out that estimates of 2.6 percent for agriculture for the whole year may be on the lower side," the Finance Minister said.

Besides agriculture, the base of 2006-07 has also increased to 9.6 percent from the original 9.4 percent, he said, adding this may also have an impact on the GDP growth rate for the current fiscal.

Pointing out that CSO, CMIE, NCAER and CRISIL have more or less agreed that services will grow at double digits this fiscal and industry at over 9 percent, the Finance Minister said there is a vast difference in estimates of agriculture.

Against the CSO estimates, CMIE projected the farm sector growth at 3.9 percent, NCAER at 3.8 percent and CRISIL at 3.4 percent.

He said only 0.2 percent more growth is required to push up the economic growth rate to 8.9 percent than what is projected by CSO.

"Let us see how agriculture comes out to be finally. We might still get growth rate close to 9 percent. Like all estimates, these estimates are usually revised upwards, because these are conservative estimates... I take this bit of news with a sense of disappointment... I think final news should be better," he said.

He said the CSO estimates should not affect the target of average nine percent growth rate per annum for the Eleventh Five Year Plan, culminating into 10 percent growth rate in the final year.