RBI revises GDP growth estimate to 7 per cent

New Delhi: The Reserve Bank of India on Wednesday revised upwards its overall GDP growth estimates for the current fiscal to 7 per cent, with a continued upward bias. This is against the 6.5-7 per cent estimate revealed during the mid-term review of the monetary and credit policy announced in early November.

"There is room for great optimism in growth prospects than before. It is reasonable to expect that unless there are unforeseen circumstances, the overall GDP growth for 2003-04 as a whole, which was estimated at 6 per cent at the beginning of the year and 6.5-7 per cent in November, is, on latest assessment, likely to be higher and around 7 per cent with a continued upward bias," the RBI Governor, Dr Y. Venugopal Reddy, said.

He said in the backdrop of "favourable" developments, "there is merit in maintaining the status quo as far as the monetary and credit policy measures are concerned, while pursuing the reform process." The RBI Governor felt that the buoyant economy would "provide the main springs for a strong revival of investment by industry."

Speaking at the Annual General Meeting of FICCI here, Dr Reddy also said the inflationary situation "continues to be benign for 2003-04" and that inflation is expected to be in the range of 4-4.5 per cent as against 5-5.5 per cent assumed in April last year.