New Delhi, Nov 9: A healthy growth of 7 to 7.5 pc could be expected amidst global economic crisis eroding output across sectors, said Prime Minister Manmohan Singh on Sunday, Nov 9 addressing the Indian community in Oman. "Due to the current financial crisis, growth rate may come down somewhat next year, but I am still confident that we will be able to achieve a rate of between 7-7.5 per cent," he said. His forecast is a tad lower than the 7.7 projected in the Reserve Bank's survey of forecasters released earlier this month. The International Monetary Fund's World Economic Outlook Update has pegged growth at a much lower 6.3 per cent for next year.
Already, the industrial production growth for August was a poor 1.3 per cent, followed by a modest 5.1 per cent growth in six core infrastructure industries in September. These are measures of how the industry has been expanding and tell us what to expect.
Besides, high cost of borrowings has made credit unattractive, thus hitting investments - key to robust economic growth. While the RBI has lowered key short-term lending rates, the government has goaded public and private sector banks to slash lending rates to increase money supply.