New Delhi: The government is not optimistic about achieving 9 percent GDP growth in the next financial year as well. Prime Minister’s Economic Advisory Council believes that in next FY, any significant GDP growth figure does not seem to be obvious. It is expected to be in between 7.5-8 percent during this time period.

Council has suggested the government to put on hold its decision on petroleum subsidy in order to improve the state of government treasury.
On the other hand, council has improved the present estimation of 6.9 percent GDP growth in the current FY.

According to council, 2011-12 GDP growth will be 7.1 percent. However in July 2011, council had estimated a GDP growth of 8.4 percent for the current FY. It is noted that in the 2010-11 FY, economy registered GDP growth rate of 8.4 percent.

As far as agriculture sector is concerned, a 3 percent growth rate has been estimated in the current FY by the council. But, Central Statistical Organisation has pegged agricultural growth rate at 2.5 percent for this FY.

Giving sluggish growth figures, Council Chairman C Rangarajan has said that in every probability inflation figures will remain in control in next FY. Council has estimated inflation to be in the range of 5 to 6 percent next year. Despite that, it has suggested the government to keep constant vigil on the prices of food products.

It has further said that apart from the focus on increasing agricultural production, the government should also concentrate on building strong supply-chain infrastructure for procurement of foodgrains, fruits, vegetables and milk products.
C Rangarajan has expressed concerns over increasing subsidy on fertilisers and petroleum. We should decontrol diesel prices in different phases. As far as LPG and Kerosene are concerned, the government should mull over suggestions given in different reports.

While releasing economic review for 2011-12 on Wednesday, C Rangarajan has said that fiscal deficit will be higher than the budget estimation of 4.6 percent.

When asked about reasons of slowing economy he said that the government should consider tax reforms in the country. Emphasising on the needs to improve tax administration he said that tax rate should be brought to the point as it used to be before the global crisis.