Indian economy stabilising: Ahluwalia

Montek Singh Ahluwalia, deputy chairman of the Planning Commission said the Indian economy is stabilising despite the short-term blip due to the constraints of the weather.

Speaking on the sidelines of a conference, Ahluwalia said the steady growth in credit offtake and capital inflows signalled that the country's economy is on the recovery path and could stabilize over the next six months.

Early this month, Ahluwalia had said the Indian economy would grow at 6.3 per cent in the current fiscal (2009-10) and, in a worst-case scenario where farm sector output is affected badly, the growth rate could be as low as 5.5 per cent.

Ahluwalia said drought might retard India's growth from 6.1 per cent logged in fiscal first quarter of 2009-10, adding, the economy would end the current fiscal with a 6.3-per cent growth.

The Indian economy grew 6.7 per cent in 2008-09 against the over 9.0 per cent growth recorded in the past three years and the current year growth is seen by may at around 6.0 per cent.

Ahluwalia also said the steady flow of foreign capital into the country pointed to stability returning to the economy in the view of overseas investors as well.