Mumbai: Seeking to dispel fears of slowdown in growth rate due to the worsening economic climate, Planning Commission Deputy Chairman Montek Singh Ahluwalia on Monday said the economy would grow between 8.2 and 8.5 per cent this year.
"A reasonable growth target for this year would be between 8.2 and 8.5 percent," Ahluwalia told reporters after a meeting with chief ministers of the western region on the approach paper to the 12th Plan, here on Monday.
He said a GDP growth of even 8.2 per cent cannot be called a "slowdown" in the real sense and added that we should look at increasing growth in the subsequent years.
The economy grew by 8.5 percent in FY11, a tad less than what was initially projected at 8.6 percent as Q4 growth tempered to 7.2 percent on the back of the continued monetary tightening by the Reserve Bank to tame inflation.
This moderation has given way to fears of slowdown in growth rate in the current fiscal. Worries also arise from the rising crude and commodity prices and the general rise in inflationary pressures in almost all the economies, besides the petering out of the growth momentum in the Western economies, primarily the US where a double-dip is feared.
With an eye to tame headline inflation, the RBI raised its key rates a record 10 times since March 2010, the last being a 25 bps hike on June 16. This has led to fears of a slowdown in investments and hence, the assumption that the overall GDP growth will be affected.
A slew of international agencies have also pegged down the country's growth forecast for the year. According to the International Monterey Fund, GDP will slowdown to 8.2 percent in 2011, while the World Bank forecast is 8 percent or thereabout for this calender year.
Ahluwalia said growth will be slow in 2011 the world over compared to 2010, which was a rebound year.