Economy likely to grow at 8-8.5% in FY'12: Ahluwalia

NEW DELHI: The Planning Commission today said the economy could expand by 8-8.5 per cent this fiscal, but may not be able to achieve 9 per cent growth under the current circumstances.

"I would definitely say 9 per cent economic growth in 2011-12 does not look feasible. But anything above eight per cent would be pretty good by any standard," Planning Commission Deputy Chairman Montek Singh Ahluwlia told reporters here.

He said, "I think lowering (economic growth target) from 9 per cent is very reasonable. RBI has actually lowered it to 8 per cent. I think it could be better than 8 per cent and 8.5 per cent is not an unreasonable expectation."

Referring to Finance Minister Pranab Mukherjee's recent statement that the growth projection of 9 per cent was made in January, Ahluwalia said, "since January there are many developments across the world and also there was some slowing down in the pace of industrial growth."

On the industrial growth numbers for March, he said, "(industrial growth of) 7.8 per cent (in 2010-11) is not a big surprise. It is roughly what we thought it would be. The important thing is that the monthly number have shown a significant improvement and that is very welcome."

The industrial growth has improved to 7.3 per cent in March compared to 3.6 per cent in February this year.

Referring to the moderation in food inflation to a 18-month low of 7.7 per cent, Ahluwalia said, "Softening is something which we have expected...I do think that the inflation is on its way down."

Going ahead, he added, "I am hopeful that it (average inflation for 2011-12) may be around 6 per cent."