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'GDP to grow by 6-6.5% in 2002-03'

Reserve Bank of India Governor Bimal Jalan said on Monday that the economy will grow by 6 to 6.5 per cent in the next fiscal and by about 7 per cent in medium-term of 4-5 years.

"I think, this year should be better. Growth (in GDP) should be at least 6-6.5 per cent. In the medium-term of 4-5 years, I think growth should be about 7 per cent," the RBI Governor said on the sidelines of a seminar jointly organised by CII and NCAER in New Delhi.

He said all the economic indications have been favourable to higher growth with positive signs of recovery in the world economy and credit pick up in India.

Explaining the prospects, Jalan said that despite the substantial increase in oil prices inflation has remained low, while there are signs of recovery of the world economy and the liquidity situation ''is more than good.''

The country had achieved an average growth rate of 6 per cent in the past two decades despite the adverse conditions such as high inflation and interest rate and the bad balance of payment position.

Describing the present BOP situation as comfortable, he said even if there was a flight of capital from the country there would not be any BOP crisis, he asserted.

The prospects for the next five years were better than in the past 20 years, he said. The capacity of India to withstand shocks, both external and domestic, were much better now, Jalan pointed out.

The economy was estimated to grow at 5.4 percent in the current financial year, he said.

Additional inputs: UNI

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