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India to recover faster, may post 7% growth

Source: PTI
April 29, 2009 19:40 IST
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Projecting an up to 7 per cent economic growth rate in the current fiscal for India, credit card firm Mastercard on Wednesday said the country could recover from the global meltdown faster than many other markets as it has been less capital intensive in its development.

"I expect the Indian economy to rebound in the second quarter (April-June) of this (calendar) fiscal. I would peg India's growth rate for fiscal 2009-10 at up to 7 per cent," MasterCard's International Economic Advisor Yuwa Hedrick-Wong told PTI.

Appreciating the RBI's efforts to increase credit flow through rate cuts, he said the Indian economy has so far shown itself to be "very resilient".

Unveiling a report 'MasterCard Worldwide Insights', the NYSE-listed firm cautioned that a high government deficit has limited the scope of more aggressive fiscal spending.

"(New) Delhi has unfortunately pursued a pro-cyclical fiscal policy in recent years; providing massive fuel and consumption subsidies and waiving farmers' loans during 2006-2007, a time of rapid economic growth," it said.

"Today, the government deficit (central and state level combined) is over 11 per cent of GDP, shackling the government's ability for more aggressive fiscal spending," the report added.

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