No Dubai impact on Indian economy: PMEAC

No Dubai impact on Indian economy: PMEAC
The Times of India, November 30, 2009, Page 17

TIMES NEWS NETWORK

New Delhi: Just before the release of economic data for the second quarter, Prime Minister's economic advisory council (PMEAC) chairman C Rangarajan said GDP growth is likely to be 6.1% in Q2 while expressing optimism that the target of 6.5% in 2009-10 was achievable.

GDP data for the second quarter is to be released on Monday. In previous quarter, growth rate was 6.1%, same as Rangarajan has projected for Q2. To achieve 6.5% growth in the entire fiscal, GDP needs to grow by at least 7% and above in the remaining two quarters.

The PMEAC chief, however, ruled out any impact of recent developments in Dubai on the country's economic activity. He said much of India's growth was driven by domestic demand and less on external factors. "The second quarter may reflect to some extent the impact on agriculture. Therefore, the growth rate may not necessarily exceed very much over 6.1% which we saw in the first quarter," Rangarajan said.

The PMEAC chairman said the panel's forecast of 6.5% for the year as a whole was still achievable backed by strong industrial and services growth. "They will be stronger in the second half and will make up for the impact of weak monsoon on agriculture in the third quarter," he added.

The government is likely to review its stand next month on the stimulus packages it had announced earlier to perk up the sluggish economy as pressure mounts on increasing decline in its revenues. The government would have a roadmap by December to consolidate its fiscal position over the next five years, FM Pranab Mukherjee said in Chandigarh.