Inflation not to impact projected 8.5 per cent growth rate for FY10 : CII

The outlook for the Indian economy with an estimated 7.2 per cent GDP growth rate in FY10 remains buoyant. However, agriculture, the largest employer in the country, shrank by 0.2 per cent even as industry posted a robust 8.2 per cent growth last year.

CII president Hari S Bhartia, managing director of pharma company Jubilant Organosys took over the reins from TVS Group's Venu Srinivasan, told Business Line, the growth agenda and challenges ahead emphasised that though reforms in agriculture and storage facilities are important, education and skill development should be the highest on the agenda.

Replying to a question regarding whether rising inflation and high food prices would impact CII's projected growth rate of 8.5 per cent for the fiscal he said that like last year high food prices and inflation should not affect growth adversely and added that he thought inflation would start to moderate soon.

He added that it was known that agricultural production would be short by -0.2 per cent, which was not a huge shortfall with a lot of it being due to supply-related issues.

He was hopeful that monsoon would be better than last year and supply-related issues would lessen. He added that achieving 8.5 per cent growth was possible.

Regarding problems for the industry at the state-level particularly on land acquisition he said CII would come out with a white paper on land acquisition soon. He said the CII was also working on the National Manufacturing Policy which focuses on manufacturing zones in the states.
He said the CII was pretty clear that the larger share should be available from government acquired land. Some states like Gujarat and Karnataka are doing well in this by creating land banks.