RTTNews - C. Rangarajan, Chairman of Prime Minister's Economic Advisory Council, said India's economy would grow 7%-8% in the next fiscal, considering the increase in demand domestically, Economic Times reported.
He, however, expressed that only a recovery in exports would push the growth rate to 9%, and this could be achieved only if developed countries come out of recession. Exports account for around a fifth of the total economic output of the country, he added.
Rangarajan said India's economic growth was affected due to deficient monsoon, and did not agree that the overall growth was impacted significantly due to agriculture that accounts of 18%-20% of the economy. He felt that the distress in the drought-hit districts will be severe. The country has declared 246 out of 626 districts as drought hit areas.
He said priority should be given to power generation to boost the economic growth. The power generation by power utilities was only 2.7% in 2008-09. He suggested increasing the power output to provide impetus to growth. He said achieving the Eleventh Five Year Plan target of 50,000 MW would be difficult, as the country has added only around 20,000 MW in the three years to 2008-09.
Rangarajan said that considering the slow pace in building power production capacity, the country needed to add additional 50,000 MW capacity in the last two years of the Eleventh Five Year Plan ending 2011-12. The authorities should also make available coal for the thermal power plants to achieve the target, he added.
Economists stressed on the need to reform coal sector as well to address to fuel shortage. The economic survey of 2009-10 indicated that private entry into coal mining was needed to reverse the substitution of domestic coal by imported oil and coal.
For comments and feedback: contact email@example.com