Icrier Review of Indian economy 2009-10

ICRIER, the New Delhi based think tank has released its  review of Indian economy for 2009-10.

Despite signs of recovery from the global financial crisis, the GDP growth rate for the Indian economy is likely to be between 5.8 to 6.1 per cent in 2009-10, below the 6.7 per cent recorded in fiscal 2008-09. While there has been an improvement in Indian industry, particularly the manufacturing sector, the adverse impact of the fall in kharif production due to a rainfall deficiency will act as a drag on the overall growth of the economy. In the current financial year, the major policy challenges for the government will come from the rather sharp rise in inflation and deteriorating public finances. The balance of payments situation may also require policy attention despite a narrowing of the current account deficit and a considerable capital account surplus because of the appreciation of the rupee.

It has interesting scenario analysis on India’s debt ratio (Gross Govt Debt as a % of GDP) in future given changes in interest rates, primary deficit and growth rate in nominal GDP. Lots of possibilities there with the best case for India being interest rates at 7%, primary deficit at 3% and GDP growth at 14%.

It also looks at the likely growth rate of GDP given the weak monsoons. They expect agriculture to decline by about 4.2% to 6.0% in 2009-10 and GDP at 5.8% to 6.1%. This is lower than EAC estimate of 6.5% plus and in line with RBI’s 6% with an upside bias.

One Response to “Icrier Review of Indian economy 2009-10”

  1. Icrier Review of Indian economy 2009-10 « Mostly Economics - Pasarici.NET Blog Says:

    […] post: Icrier Review of Indian economy 2009-10 « Mostly Economics Share and […]

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