PMEAC projects current fiscal GDP growth at 7.1 per cent

The Indian economy is estimated to grow at 7.1 per cent in 2011-12, marginally higher than the 6.9 per cent growth rate projected in the Planning Commission's advance estimates, the Prime Minister's Economic Advisory Council (PMEAC), headed by Dr C Rangarajan, said in its pre-budget review of the economy.

PMEAC said it expected a slightly higher growth in agriculture and construction sectors than the Plan panel.

Output growth in the farm sector has been especially strong in the 2011-12 financial year, coming on top of an already strong growth in the previous year.

The average GDP growth rate in the farm sector in the first half of the fiscal was 3.7 per cent, the council noted.  Along with the strong growth trend in horticulture and in the animal husbandry sectors, overall farm sector GDP growth for 2011-12 will average 3 per cent, PMAC said.

The mining and quarrying sector has shown particular weakness this year. This was due to a negative growth in coal production in the first four months of the year, a sharp decline in natural gas production in the KG-D6 fields and negative growth in crude oil output in the third quarter of the year.

Coal production has seen some improvement since November. However, natural gas output growth is likely to remain in the negative for the rest of this fiscal, according to the PMAC.