Economy can do better than 7.6 pc this fiscal: Montek Singh Ahluwalia

NEW DELHI: The Planning Commission today said that the economy could do better than 7.6 per cent growth for this fiscal as projected by the Reserve Bank of India in its half yearly monetary policy review.

"I think, it (economy) might do better 7.6 per cent (this fiscal. But you cannot rule out 7.6 per cent," Planning Commission Montek Singh Ahluwalia told reporters here.

The Reserve Bank today lowered the economic growth forecast to 7.6 per cent for the current fiscal. The central bank had earlier projected the Indian economy to grow by 8 per cent in 2011-12, lower than 8.5 per cent recorded in 2010-11.

"Slower global growth will have an adverse impact on domestic growth, particularly on industrial production, given the rising inter-linkages of the Indian economy with the global economy," RBI said in its Monetary Policy Review.

About the raising short-term lending and borrowing rate by 25 basis points (0.25 per cent), Ahluwalia said, "It is more or less on expected lines. They have rasied the repo rate by 25 basis point but RBI also said no more rate hike. I think that market can sense that this one more effort (to tame inflation)".

On deregulating the saving bank account interest rate, he said, "I have always been in favour of deregulating the saving banking (interest) rates. Keeping it fixed have been an illogical thing, so it is a good news".