5-6 p.c. GDP rise reasonable - RBI

MUMBAI, OCT. 22. The Reserve Bank of India today termed the projection of growth rate of the Indian economy at 5 to 6 per cent as `reasonable' as compared to that made by the International Monetary Fund (IMF) and other domestic as well as international monitoring agencies.

``Balancing various factors and assuming no further serious disruption in the world economic environment, at this stage, a projection in the range of 5-6 per cent growth rate in the current year may be reasonable for the purpose of credit and monetary management," RBI said in its mid-term review of the Monetary and Credit Policy for 2001-02.

India is likely to be one of the very few countries in the world which would show a growth rate of this order in the current year, the RBI said.

The recent growth projections made by the IMF, other international agencies as well as domestic research and monitoring agencies have ranged widely from 4.5 to over 6 per cent, the RBI added. In view of the global uncertainty and the impact of global slowdown on exports as well as domestic growth, the apex bank said a firm projection of revised growth rate for the year as a whole was difficult. The RBI said while agricultural performance was encouraging, the position regarding revival of industrial sector and export growth in the first half of the current year was unfavourable.

The RBI said as per the latest estimates by the Central Statistical Organisation, the growth rate of industrial production during April-August 2001 was lower at 2.2 per cent against 5.6 per cent in the corresponding period of the previous year and that deceleration had been observed across the sectors.

Stating that India's export growth was negative due to global slowdown, the RBI said ``Exports in dollar terms during this period declined by 2.3 per cent against a growth of 21.1 per cent in corresponding period last year."

While imports increased by 2.5 per cent as against an increase of 13.8 per cent last year, trade deficit in the first five months of the current fiscal at $4.6 billion was higher than $3.7 billion in the same period last year.

Due to moderation of oil prices, India's oil imports had declined by 6.1 per cent as against an increase of 78.7 per cent in the corresponding period of the previous year, it said. For rest of the year, there is some uncertainty about the likely course of international oil prices, it said adding if the average oil prices for rest of year were assumed to be at $25 a barrel, India's oil import bill for 2001-02 would be in the range of $17.5-18 billion as against actual imports of $15.6 billion in the previous year.

The RBI expected that the current account deficit would still be well below 2 per cent of gross domestic product and no significant pressures on balance of payments were expected.

- PTI

Send this article to Friends by E-Mail

Section  : Business
Previous : Bullion rates
Next     : Loan scheme to minimise risks