Economy likely to grow by 8.5% in FY12: PMEAC

NEW DELHI: In the backdrop of the RBI's tight monetary policy and high inflation, PMEAC Chairman C Rangarajan on Tuesday said India's economic growth in the 2011-12 fiscal is likely to be about 8.5%, lower than the Budget projection.

"I believe (it would be closer to) 8.5%," he said at an Organisation for Economic Cooperation and Development ( OECD) event. In his Budget speech, Finance Minister Pranab Mukherjee had pegged economic growth for 2011- 12 at 9%.

However, the Reserve Bank, in its monetary policy in May, said that GDP growth during 2011-12 would be only around 8%. The Chairman of the Prime Minister's Economic Advisory Council (PMEAC), however, exuded confidence that India has the potential to clock GDP growth of 9% in the medium term.