'Economy to grow by 7.5% this fiscal, over 8.5% in next'

Finance minister Pranab Mukherjee expects the economy to expand by a healthy 7.5 per cent this fiscal, a shade lower than the 7.75 per cent growth projected by his ministry in December.

"The IIP figures for the month of December 2009 suggest that we may end the year 2009-10 with a growth rate of 7.5 per cent and next year growth (could be) at over 8 per cent", he said, addressing a seminar in New Delhi.

The finance ministry, in the mid-term review of the economy tabled in Parliament in December, had said that economic growth during the current fiscal could exceed 7.75 per cent.

However, the Central Statistical Organisation, which estimates the national income, recently pegged economic expansion at 7.2 per cent for the current fiscal.

Mukherjee expects growth to marginally exceed the CSO's projection of 7.2 per cent, driven mainly by a sharp rise in industrial output, which jumped by 16.8 per cent in December as compared to a decline of 0.2 per cent a year ago.

Hit by global financial crisis, India's GDP growth rate slipped from over 9 per cent in the three till 2007-08 to 6.7 per cent during 2008-09.

Image: Pranab Mukherjee