New Delhi: Playing down fears of a slowdown, Planning Commission deputy chairman Montek Singh Ahluwalia said he is confident of 8.5 per cent growth this fiscal.
According to the latest GDP data, the economy is down by more than a per cent compared to the previous quarter.
In the January to March quarter, the GDP grew by 7.8 per cent against 8.2 per cent earlier.
Last year's economy did grow at 8.5 per cent against 8 per cent the previous year. But that's below the government's estimate of 8.6 percent.
Speaking to Karan Thapar in a CNBC-TV 18 exclusive, Deputy Chairman of the Planning Commission Montek Singh Ahluwalia said that it's nothing to worry about.
Karan Thapar: The distinct cloud over the horizon is that growth in quarter 4 came down to 7.8 per cent which is a full 1/2 per cent quarter three and within that industrial growth has slowed down and services have slowed down. As Deputy Chairman of the Planning Commission, are you concerned about that?
Montek Singh Ahluwalia: Well, let me say that change in last year's growth estimate is minuscule. I mean they had projected 8.6 for the year as a whole and it is now 8.5. So I don't think that is something worth worrying about.
It's true that if you look at the last quarter, that growth rate is 7.8. Now its been declining over successive quarters because you know during recovery phase it had shot up so you expected it to go down a little bit. Real issue is our subsequent quarter is going to be better. Now our assessment throughout was that in the next year we will do better than in the last quarter of the year that has just ended. So from 7.8, the economoy hopefully quarter by quarter should do a little bit better. What we'll end up with in the current year that's 2011-1012, people have been talking about 8.5 per cent, my guess is that even if we are anywhere between 8.25 and 8.5 and some people go even below that, it's still a very very good performance.
Karan Thapar: I get the impression that you believe that 7.8 which was the growth in the last quarter of last year, may actually be the bottom line and you expect the economy to do better in the next quarter and thereafter as well.
Montek Singh Ahluwalia: Yes, compared to 7.8 per cent. But you know if you would look at it on a year on year basis, what I am saying is that if last year that is 2010-2011, the economy grew at 8.5 per cent, we shouldn't be too shocked if in the current year it grows at 8.25 per cent.
Karan Thapar: Except that wasn't our expectation in comparison to what the finance minister said when declared his budget which was 9 per cent, 8.2 is not very good and 7.8 per cent for that last quarter is particularly worrying.
Montek Singh Ahluwalia: Well quarterly estimates I think are not, they flip around quite a bit. So let's just look at 8.2. It's absolutely true that 8.2 is significant downgrading from 9 per cent. But you know the information that the finance ministry's estimate would have been based on, is the information they had in January.