GDP to grow 7% if monsoon doesn’t fail

GDP to grow 7% if monsoon doesn’t fail
The Times of India, June 30, 2009, Page 20

New Delhi: The chairman of PM's Economic Advisory Council, Suresh Tendulkar, said on Monday the economy would expand by at least 7% during the current financial year, provided the monsoon does not fail. He ruled out the need for pressing the panic button at the moment.

Talking to news persons on the sidelines of a function to observe the third Statistics Day here, Tendulkar said, "If the monsoon does not fail, the economy will grow by at least 7% (during 2009-10). Asked about the impact of delayed monsoon on agriculture and the economy, Tendulkar said, "it is too early to press the panic button." Rainfall, according to latest official estimates, is likely to be only 93% of the long-period average.

As regards inflation, Tendulkar said, it is likely to remain between 5-6% by the end of current financial year. "The Wholesale Price Index would still be under 5-6%, if monsoon are all right. If monsoon fails, it will be little more", he added. Tendulkar also expressed confidence that the economy, which has been reeling under the impact of the global financial meltdown, will recover by September.

Having grown by about 9% continuously for three years, the growth rate slipped to 6.7% during 2008-09 on account of meltdown. Noting that high interest rate was a matter of concern, Tendulkar said, it might not be possible for banks to lower lending rates in absence of reduction in deposit rates. He added that RBI's policy rate cuts was getting reflected on lending rates. AGENCIES

‘WPI unsatisfactory inflation indicator’

New Delhi: Wholesale Price Index (WPI), currently used to measure inflation, is an "unsatisfactory" indicator of price movement and is eroding the credibility of government data in the minds of people, said the PM's Economic Advisory Council chairman, Suresh Tendulkar

"It (WPI) is an unsatisfactory indicator of rate of change of prices of consumer goods with which our everyday experience of inflation is associated", he said while speaking at the third Statistics Day here on Monday. AGENCIES