New Delhi, Feb 7 (PTI) Indian economy is projected togrow by 8.6 per cent in 2010-11, the fastest in three years,on the back of a sharp recovery in farm output, but highinflation remains an area of concern.
A growing economy would help the country''s annual percapita income to expand by 17.3 per cent to Rs 54,527 atcurrent prices and by 6.7 per cent to Rs 36,003 at 2004-05prices, according to the advance estimates of national incomereleased today.
Per capita income is calculated by evenly dividing thenational income among the country''s population.
Finance Minister Pranab Mukherjee and the Reserve Bankare however, concerned about high inflation, particularlyof food articles.
"All along I was maintaining, it should be around 8.5 percent plus. 8.6 per cent is accepted," Finance Minister PranabMukherjee said adding, "Now the other issue is inflation,trade balance... these are to be addressed".
In December, general inflation was 8.43 per cent and foodinflation for the week ended January 22 stood at 17.05 percent.
Abundant rains in the last Monsoon season would helpagriculture and allied activities to expand by 5.4 per cent in2010-11 compared to just 0.4 per cent in the previousfinancial year.
Weathering the global slowdown, the Indian economymanaged to expand by eight per cent in 2009-10 and 6.8 percent in 2008-09.
Expected to grow by a shade better than 8.5 per centprojected by both RBI and the Finance Ministry, the GrossDomestic Product (GDP) would expand to Rs 48.80 lakh crore(USD 1.07 trillion) in 2010-11 at the constant prices (with abase of 2004-05).
The 8.6 per cent GDP growth prospects, however couldnot cheer markets. The BSE benchmark Sensex closed almost flatat 18037.19 on concerns of inflation and rising interestrates.
While services such as trade, hotel, transport andcommunications improved to 11 per cent from 9.7 per cent, themanufacturing remains static at 8.8 per cent year on year.
Mining and quarrying is likely to grow by 6.2 per cent,compared to 6.9 per cent a year ago, while electricity, gasand water production will grow up by 5.1 per cent, as against6.4 per cent in the previous fiscal.
Chief Economic Adviser in the Finance Ministry KaushikBasu said the "target of 9 per cent economic expansion for thenext financial year is well with in the reach".