No decision on lowering GDP projection yet: FM

Finance Minister Pranab Mukherjee said on Monday the government has not taken any decision yet on revising the economic growth projections for 2011-12.

"We have not taken any decision yet. . .," Mukherjee told reporters when asked if the government is planning to revise the gross domestic product growth projections downwards.

In the Economic Survey, the government had projected that India's gross domestic product growth would be between 8.75 per cent to 9.25 per cent this fiscal.

However, in its monetary review for the fiscal, the Reserve Bank pegged the GDP growth at 8 per cent, lower than the 8.5 per cent recorded in the previous fiscal.

Reserve Bank of India has been holding a view that controlling inflation is top

priority, even at the cost of growth.

The central bank has hiked key policy rates 10 times since March 2010 in its bid to check price rise.

The hard interest rate regime had seen the industrial production growing by 6.3 per cent in April 2011 compared to an over 16 per cent growth in the year-ago period, prompting analysts to say that probably economy is slowing down.

Global ratings agency Fitch has also lowered its growth forecast for India in 2011 to 7.7 per cent from 8.3 per cent previously.

The Fitch report says the economic outlook is likely to remain somewhat clouded by persistently high inflation.

Last week in Washington, the Finance Minister had said that the Indian economy is likely to maintain the growth momentum of the previous fiscal in 2011-12 as well.

In 2010-11, the economy is estimated to have expanded at 8.5 per cent.