Economy likely to do better in 2012-13: Basu
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India's economy will likely grow faster next fiscal year than in 2011-12 because of an improved external environment and a shift in policy focus from containing inflation to growth, a top government adviser said on Wednesday.
However, Chief Economic Adviser Kaushik Basu told Reuters in an interview that public finances were expected to remain under pressure in 2012-13.
Although the official forecast for 2012-13 is still to be released, some private economists now expect the annual economic growth to be below 7 per cent, lower than 7-7.5 per cent widely expected to for the year to end-March 2012.
"I would forecast next year to be better than the present one," Basu said, predicting growth in the current year of close to 7.5 per cent, a pick up the following year and a return to 'full-steam' growth of around 9 per cent by 2013-14.
In December, the government slashed its full-year growth forecast for the current fiscal year to about 7.5 per cent from 9 per cent amid slowing domestic and global demand.
Gross domestic product growth slowed to 6.9 per cent in the quarter to end-September, its weakest pace in more than two years. Industrial output contracted in October for the first time in more than two years.
"The U.S. is on a slow rise. Europe is still on the brink but if you ask me to bet, I would say, on balance it would escape falling into another recession," he said.
"If these expectations are right, then I think India has enough fundamental strength that we will get out of the current slowdown and begin to move."
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