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India's GDP to cross $1 trillion in 2008
By siliconindia staff writer
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Monday, 26 February 2007, 18:30 IST |
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New Delhi: The Deputy Governor of Reserve Bank of India (RBI), Rakesh Mohan announced that the Indian economy is likely to post 9 percent sustained growth rate and cross the threshold of $1 trillion GDP by the next financial year.
India's growth rate is set to expand at 9.2 percent in the current fiscal year ending Mar. 2007. This will be the country's fastest growth in almost two decades, underlining its growing clout in the world economy as manufacturing and service firms move ahead reported a news agency.
"We should be a trillion dollar economy by next year. I mean 2007/08," said the deputy governor, at a fixed income conference in Agra.
According to World Bank data, only nine economies had a GDP of more than $1 trillion, at the end of 2005, with Brazil, South Korea and India the next closest with GDPs of almost $800 billion.
India's growth rate has been steady over the past few years and has brought down high fiscal deficit to a manageable level of around 4 percent of GDP from highs of 6 percent.
Experts say the deficit may be as low as 3.6 percent of GDP, down from 4.1 percent in 2005/06, due to higher-than-expected tax revenues in the fiscal year to March 31.
"It is a major improvement that will take place to move to those (fiscal deficit) targets. But even by international standards 6 percent combined deficit is high," Mohan, said.
The government recently authorized the RBI to lower the mandatory percentage of deposits banks must hold in government bonds. The present law requires banks to invest a minimum of 25 percent of their deposits in government bonds.