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Chief Economic Advisor expects India's economic pace to accelerate in Q4

November 30, 2011 - New Delhi

Chief Economic Advisor to the Finance Ministry, Dr Kaushik Basu, on Wednesday said India's economic growth in the current fiscal year ending March 2012 is expected to be around 7.5 percent, as the growth in fourth quarter will be better than the 6.9 percent growth logged in the second quarter.

He said that the growth would certainly pick up by the end of this year.

"Given that the biggest factor is the global scenario and then the control of inflation, my expectation is that before the end of the year we will pick up, so the fourth quarter should be distinctly better and the overall growth scenario," said Basu.

"Yes, we will not go to the very rosy picture that we had even a year ago of the recovery but we should come out much better than what we have seen happen in the latest quarter," he added.

Basu also said he does not rule out a small slippage in the budgeted fiscal deficit target of 4.6 percent of GDP.

Basu said that he really doesn't have a definite figure, but expects a growth of around 7.5 percent.

"Full fiscal growth, we are in fact right now in the middle of calculations with advisors and equations and everything that you can think of. The meeting I am going again right now is for that, so I don't really have a definite figure, about the expectation, it could be around 7.5 percent given that there is a slowdown," he said.

Strengthening the indications of an economic slowdown, India's GDP grew by just 6.9 per cent in the second quarter this fiscal in comparison to 8.4 per cent expansion in the same period last year due to poor performance of the manufacturing, agriculture and mining sectors.

GDP growth in the first half (April-September) of Financial Year 2011-12 also moderated to 7.3 per cent from 8.6 per cent in the first six months of the previous fiscal, as per the latest data released by the government on Wednesday.

During the three-month period ending September 30, 2011, growth in the manufacturing sector dipped to a meagre 2.7 per cent from 7.8 per cent in the corresponding period of 2010-11.


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