Indian economy to grow at 7.5-8 per cent this fiscal:Kaushik Basu

NEW DELHI: Amid concerns of a global slowdown, Chief Economic Advisor Kaushik Basu today said the Indian economy is expected to witness a growth rate between 7.5 and 8 per cent this fiscal.

"There is slowdown across the world...our growth rate would be 7.5 per cent to 8 per cent (this fiscal) ...India is one of the slowest slowdown," he said at ADB-India partnership silver jubilee celebrations here.

In the first quarter of the current fiscal, the Indian economy posted a growth rate of 7.7 per cent.

"We do expect some slowdown in exports in the second half of this year. Foreign direct investment for this year look very, very good," he said.

Long-run drivers of growth are remarkably good, he said. Earlier in the day, Finance Minister Pranab Mukherjee said that in the medium to long-term, India remained firmly on a high GDP growth path of 8.5-9 per cent.

"We, however, need to be alert and respond to emerging challenges and concerns, in a timely manner as we make efforts to achieve our potential as a young fast growing nation," he said.

Chief Economic Advisor Kaushik Basu said partly attributed rising inflation to high wages. In India, the biggest inflation in the last one-and-a-half years is taking place in the labour-intensive sector, Basu said.

"This is a sign of rising cost of labour and also we have data now that wages are inflating faster than good and services," he said.