Rangarajan trashes S&P figure; pegs growth at 6.7 %

C Rangarajan, chairman of the Prime Minister's Economic Advisory Council, on Monday said the Indian economy would grow by 6.7 per cent this fiscal. There were enough indications to this effect, he said, pointing out that the monsoon had turned out to be better than forecast a few months ago.

Trashing the assessment of Standard & Poor's that India's GDP would grow by only 5.5 per cent this year, he said growth is expected to pick up in the second half of this fiscal and reach 6.7 per cent for entire 2012-13.

On Monday, S&P had released its assessment cutting the growth forecast for India from the earlier 6.5 per cent to just 5.5 per cent (See: S&P lowers 2012 China GDP forecasts to 7.5 per cent India to 5.5 per cent).

''I think it is a wrong assessment. I do not know the basis for the growth rate estimated by the rating agencies. But we stand by the growth rate that we have forecast that is 6.7 per cent,'' Rangarajan told reporters on the sidelines of the annual day celebrations of the Madras School of Economics.

He expressed confidence that the economic growth rate in the current fiscal would be better than last year. ''The growth last year was 6.5 per cent; we had forecast a growth rate of 6.7 per cent for the current fiscal. I think we hold on to that growth rate.''

Observing that the agriculture sector would do better than expected, Rangarajan said, ''the monsoon has been better and the manufacturing growth will pick up in the second half of the year.''