Economy will grow 8.5%: Montek Singh Ahluwalia

Planning Commission deputy chairman Montek Singh Ahluwalia said India will achieve 8.5 per cent growth in Gross Domestic Product (GDP) this fiscal.

Speaking to Karan Thapar in a CNBC-TV 18 exclusive, Ahluwalia said: ?Well, let me say that change in last year’s growth estimate is minuscule. I mean they had projected 8.6 for the year as a whole and it is now 8.5. So I don’t think that is something worth worrying about.?

He said India will do better quarter by quarter.

?It’s true that if you look at the last quarter, that growth rate is 7.8. Now it?s been declining over successive quarters because you know during recovery phase it had shot up so you expected it to go down a little bit. Real issue is our subsequent quarter is going to be better.

?Now our assessment throughout was that in the next year we will do better than in the last quarter of the year that has just ended. So from 7.8, the economy hopefully quarter by quarter should do a little bit better.?

?What we’ll end up with in the current year that’s 2011-1012, people have been talking about 8.5 per cent, my guess is that even if we are anywhere between 8.25 and 8.5 and some people go even below that, it’s still a very very good performance,? he said.

Commenting on Union Finance Minister Pranab Mukherjee?s estimate on GDP growth, Ahluwalia said quarterly estimates flip around ?quite a bit?.

?Quarterly estimates I think are not, they flip around quite a bit. So let’s just look at 8.2. It’s absolutely true that 8.2 is significant downgrading from 9 per cent. But you know the information that the finance ministry’s estimate would have been based on, is the information they had in January.

?What I am saying is that if last year that is 2010-2011, the economy grew at 8.5 per cent, we shouldn’t be too shocked if in the current year it grows at 8.25 per cent,? said Ahluwalia.