New Delhi: The Indian economy is likely to grow at 6.7 per cent in the current fiscal year, C Rangarajan, chairman of the PM's economic advisory council (PMEAC) told reporters during the mid-year economic outlook on Friday. The PMEAC has also pegged the inflation between 6.5 and 7 per cent.
In recent years, the advisory panel has been overly optimistic about India's economic performance, and the revised forecasts are higher than estimates by private economists who now expect growth closer to 5.5 per cent for 2012-13.
The PMEAC also suggested increasing price of diesel in one or more steps and added that a deficient monsoon would pull down farm sector growth rate to 0.5 per cent.
India's economy has lost momentum due to global headwinds, sluggish policymaking, high interest rates and worries about a drought in parts of the country that may suppress investment and demand.