Economy may log 7% growth next fiscal

MUMBAI: The economy is expected to clock a growth of 7% in FY10, as the impact of fiscal and monetary policy measures would be seen on the real economy by then. Most economists, including Saumitra Chaudhuri, member Prime Minister���s Economic Advisory Council (EAC), Jahangir Aziz, chief economist, JP Morgan and Subir Gokran, chief economist, S&P���s Asia-Pacific, said the economy could see some turnaround after September. They expressed this view at a seminar organised by the Indian Merchants��� Chamber on ���Indian Growth Miracle, Myth or Reality���.

Mr Chaudhuri said in FY09 might grow around the same rate of the CSO estimate of 7.1% and could clock a 7% growth in FY10. However, he added there are genuine difficulties. Worsening economic conditions have been rapid and unexpected after the failure of Lehman, especially in Asia.

Going forward, Mr Chaudhuri said, ���While economic conditions will be better in FY11, problems of managing the withdrawal of monetary and fiscal stimuli will pose a major challenge.��� The quicker the financial sector returns to a semblance of normalcy the earlier and stronger will be the recovery,��� he added.

In a panel discussion on trends in industrial production: The years ahead, Suresh Prabhu, former commerce and industries minister said the huge fiscal stimulus package would have a huge implication on public debt and also called for policymakers to look at ways to create more jobs.