Former RBI Governor says economy on road to recovery

New Delhi, Aug 7 (ANI): Former Governor of the Reserve Bank of India (RBI) C Rangarajan has said that the country's economy would see an improvement in the second half of 2009-2010.

Rangarajan said he expected the economy to grow at a rate of 6.5 per cent to 6.7 per cent in the year 2009-10.

"The question may be asked whether the impact of the crisis as far as India is concerned is coming to an end or not. Now, I see signs of recovery. The second half of 2009-2010 will see an improvement. On the whole, through the year 2009-10, my own estimate is that the economy will grow at 6.5 per cent to 6.7 per cent," he said.

Rangarajan also said the economy could go back to 9 per cent growth rate only if the world economy improved.

"But we will see distinct improvements in the growth rate on the fiscal 2010-2011.

Perhaps the economy will grow between 7-8 per cent. But however, for the economy to go back to 9 per cent growth level, the world economy has to improve. It is only when the world economy improves probably, we will go back to the growth rate of 9 per cent," he said.

India's fiscal deficit is projected to swell to a record 6.8 per cent of gross domestic product in the fiscal year 2009-10 (April-March) that has to be funded by a record high borrowing of 4.51 trillion rupees. (ANI)