RBI sees economy growing over 7% in 2003-04

Thursday, 08 January 2004, 20:30 IST
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NEW DELHI: Helped by buoyancy in all sectors of the economy, India's gross domestic product (GDP) growth in the current fiscal year is expected to exceed seven percent, Reserve Bank of India (RBI) Governor Y.V. Reddy said Wednesday. "There is room at this juncture for greater optimism in growth prospects than before," Reddy told a business meeting organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) here. He said it was reasonable to expect that unless there were unforeseen circumstances, the overall GDP growth for the year 2003-04 was likely to be "higher and around seven percent with a continued upward bias". RBI had estimated the country's economic growth in the current fiscal year at six percent in April. The growth projection was revised upwards between 6.5 and seven percent in November on improved agriculture production. India's economy grew by a moderate 4.3 percent in the fiscal year that ended March 31, 2003, mainly due to a 3.1 percent fall in agriculture produce as the worst drought in three decades ravaged large parts of the country. Enthused by the better-than-expected monsoon rains, the Indian government as well as leading think tanks have projected an over seven percent growth in the current fiscal year. A seven percent growth would be the strongest full-year expansion after six years. The last time India's economy grew over seven percent was in 1996-97, when it touched 7.8 percent. Reddy said macroeconomic environment in India had continued to improve during the current fiscal year and it had reinforced the positive outlook on the domestic economy. "Comfort can be drawn from the fact that the Indian economy has demonstrated considerable resilience to exogenous shocks in recent years," he said, adding that some "uncertainties prevail" in regard to global environment. The central bank chief, however, said it was important for the central government to rein in the spiralling fiscal deficit to achieve sharply higher economic growth. "At this juncture, it is necessary to reiterate the importance of pursuing promptly, and with resolve, fiscal consolidation for the medium term," said the RBI governor.
Source: IANS
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