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Indo American News • Friday,February 11, 2011
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Friday, February 11, 2011
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IndoAmerican News
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India’s GDP to Grow at 8.6%; Rising Prices, Volatility Remain Key Worries NEW DELHI (HT) The government on Monday tweaked up the economic growth rate for the current fiscal year, sending a mild note of cheer to an economy worried by prospects of a slowdown. India’s gross domestic product (GDP) would grow by 8.6% in 201011, marginally above its original 8.5% estimate, buoyed by a strong rebound in the farm sector, the government said. But rising prices and volatility in foreign institutional investment (FII) remain key worries. India’s economy had grown by 8.0 % in 2009-10. Overall, the data showed strong domestic demand
driving growth in India, despite some industrial sluggishness, while developed economies are showing a
bumpy recovery. Finance minister Pranab Mukherjee said the buoyancy in tax collec-
tions was reflected in the GDP growth, which has been aided by strong spending in the private sector. While private consumption is estimated to grow at 8.2 % in 2010-11 over the previous year, the growth in investment is anticipated at close to 9 %, advanced estimates of national accounts showed. Growth in government spending is estimated to moderate significantly to 2.6 % in 2010-11. India’s GDP grew 8.9% during the first six months of this fiscal year, making it the second fastest growing
economy in the world, next only to China’s estimated 9 % growth in 2010. Consumer durables sales have grown at robust pace mirroring higher purchases of goods such as televisions, refrigerators and cars and a growing consumer appetite. “The strong revival in private spending and improvement in investment growth is a welcome sign,” Mukherjee said. “However, we still have some distance to go before regaining the investment growth witnessed in the pre-crisis period,” he said. Prices, however, remain a worry.
INDO AMERICAN NEWS • FRIDAY,february 11, 2011 • ONLINE EDITION: WWW.INDOAMERICAN-NEWS.COM