India's GDP growth to cross 8% this fiscal: Panagariya

Panagariya was of the view that economy will grow at a higher rate as revenues are increasing and inflation has entered the positive zone.

India's economic growth will cross the 8 per cent-mark this fiscal on the back of good monsoon and pick up in manufacturing, NITI Aayog Vice-Chairman Arvind Panagariya has said.

"India will cross 8 per cent economic growth during the current fiscal. Good Monsoon will push farm sector growth to 4-5 per cent this year," Panagariya said.

He said the growth in the last quarter of the previous fiscal touched 7.9 per cent because of uptick in manufacturing activity and improved performance of agriculture sector.

According to the data released by the Central Statistics Office, manufacturing sector during the fourth quarter recorded a growth rate of 9.3 per cent while farm sector grew at 2.3 per cent.

India economy clocked a five-year high growth rate of 7.6 per cent in 2015-16, mainly on account of good performance of manufacturing and improvement in farm sectors.

Panagariya was of the view that economy will grow at a higher rate as revenues are increasing and inflation has entered the positive zone.

Higher wholesale inflation rate indicates the rise in margins for the industry. Rising for a second straight month, wholesale price-based inflation jumped to 0.79 per cent in May with vegetable prices witnessing a double-digit growth.

The April Wholesale Price Index-based inflation was at 0.34 per cent and in March it was (-)0.45 per cent while it stood at (-)2.20 per cent in May last year.

After remaining in negative zone for 17 months, the WPI inflation turned positive in April this year.

Retail inflation too touched a 21-month high of 5.76 per cent in May mainly on rising prices of food items.

Reserve Bank has pegged growth at 7.6 per cent for the current fiscal, while the Economic Survey has projected the economic growth at 7-7.75 per cent for this fiscal.

The image is used for representational purpose only. Photograph: Ajay Verma/Reuters