6.5% GDP forecast for 2009-10 may be revised upward: PMEAC

The Prime Minister's economic panel today said its growth projection of 6.5 per cent for the current fiscal may be revised upward on the back of the high growth of 7.9 per cent in the second quarter. "This (7.9 per cent) has turned out to be much more positive than one has expected. Both industry and services have grown strongly. Overall growth of 6.5 per cent may have to be revised upward," Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan told PTI. He further said that the dampening effect of a weak monsoon on agriculture is much smaller than anticipated. Belying predictions, the Indian economy grew by a significant 7.9 per cent in the second quarter of this fiscal, up from 6.1 per cent in the previous quarter, essentially due to a good showing by the industry and the services sector. Rangarajan further said that he expects no change in fiscal policy by the end of the this fiscal, but the central bank's main focus would now be to tame inflation. "As far as policy stance is concerned, I expect no change in fiscal policy till March-end, 2010. Reserve Bank of India's monetary policy would now be more focussed on inflation," he added. Food inflation has crossed 15 per cent in the second week of this fiscal. The wholesale price index (WPI) of food articles, fish, minerals, manufactured products, electrcity and all commodities has risen by 14.4 per cent, 26.3 per cent, minus 9.9 per cent, 0.1 per cent, 0.4 per cent and minus 0.1 per cent respectively during second quarter of 2009-10 compared to corresponding period last fiscal.