Indian economy seen growing at near 9 per cent in 2010-11

The Indian economy could grow at a faster pace of 8.75 per cent or even above 9 per cent in the current fiscal despite nudging inflation, the finance ministry said in its customary mid-term review of the economy ahead of the annual budget.

The government expects the economy to close the 2010-11 financial year with a growth rate of 8.75 (+/- 0.35 per cent), according to the report tabled in the Lok Sabha by finance minister Pranab Mukherjee.

"It is estimated that growth in 2010-11 will be 8.40-9.10 per cent. The range indicates the possibility of crossing the 9 per cent mark this year itself, but is wider than the earlier estimate owing to higher risk factors, which includes the economic situation in the euro area turning for the worse," the government said in the report.

The Mid-Year Economic Review is now called `Mid-Year Economic Analysis' as the new report includes an analysis of the prevailing situation outside of the economy as well.

The report projects the annual rate of inflation to be around 8.6 per cent, much above the 5.0 per cent level projected by the Reserve Bank of India.
 
The finance ministry has projected India's fiscal deficit to remain at the budgeted level of 5.5 per cent of GDP in the current financial year.

The government expects to bridge part of its burgeoning fiscal deficit with the completion of the stake sale of SAIL, IOC and ONGC, expected towards the last quarter of the current fiscal.