Prime Minister's econ advisor Rangarajan sees India's FY13 growth at 7.5%-8%

New Delhi: India's economy will likely grow 7.5%-8% in the next financial year 2012-13, higher than the 7.1% growth seen for this fiscal, as investments may pick up due to price stability and appropriate policy measures taken by the government, Prime Minister's Economic Advisory Council Chairman C Rangarajan said Wednesday.

“With a return of price stability, appropriate supportive policy and administrative measures, it is possible to visualize an improvement in the investment rate, notwithstanding difficult conditions in the international financial markets... Under these circumstances the council feels that the economy is likely to grow in the range of 7.5%-8%,” Rangarajan said at the release of the council's report 'Review of the Economy 2011-12’.

An improvement of 1.5-2 percentage points of GDP (gross domestic product) can be envisioned in the fixed investment rate in the next financial year, the report said.

India's mining and manufacturing sector is also likely to show significant improvement in the next fiscal over the current year, and will grow by 6% and 7.5%, respectively, it said.

The GDP growth at 7.1% for this financial year 2011-12 as seen by the council is a shade higher than the Central Statistics Office's (CSOs) advance growth projection of 6.9%.

India's fiscal second quarter (July-September) gross GDP grew 6.9%, the lowest in over two years, which along with other indicators of economy, prompted the government in December to scale down the GDP target to 7.25%-7.75% for 2011-12 from the budgeted 9%.

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