9% growth forecast difficult to achieve: Economists
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The government may be bullish about economic growth next fiscal, but leading economists are not as confident as North block mandarins about India's ability to even maintain the current rate, given domestic and global headwinds facing the country.
The economic survey tabled in Parliament by finance minister Pranab Mukherjee on February 25 had forecast over 9 per cent growth next fiscal and pegged the current year growth at 8.6 per cent.
Economists at the leading rating and research agencies maintained that achieving the higher projected growth trajectory looks unlikely, given the medium-term macroeconomic trends.
Ashwin Parekh of Ernst & Young said, "The 9 per cent plus growth projection looks difficult to achieve. The past four months have completely changed the macro-economic conditions not only for us, but for the entire global economy."
Parekh said if the oil crisis arising from the Libyan political crisis is contained within the next one month, it may not pose too big a challenge to the domestic economy, but if it extends beyond two months, it will definitely pose a greater challenge.
"But as of now we have no clarity on when the crisis will end," he said.
The bullishness might have come from the assumption that the present crisis will be over sooner than anticipated and will bring down crude prices to around $85 a barrel, he said.
Deloitte principal economist Shanto Ghosh said while projecting a higher GDP rate, the ministry has glossed over many issues. Dependence on the services sector for growth without adequate focus on skill development is risky, he said.
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