India rejects IMF projections on economic growth
New Delhi: India Wednesday rejected IMF's growth projections of 3.75 percent for the current fiscal as "pessimistic", saying that the economy is turning around and the GDP expansion will exceed 5 percent.
"I reject the IMF numbers. The Indian economy is seeing turnaround both in terms of growth in manufacturing and domestic demand and a buoyancy in exports," Commerce and Industry Minister Anand Sharma said in a statement.
Expressing similar views, Planning Commission termed the projections as "pessimistic" and said that Indian economy will grow at a rate higher than 5 percent this financial year.
Planning Minister Rajeev Shukla said, "The lowering of economic growth forecast to 3.75 percent this year by the IMF is a pessimistic projection. The economy will grow at over 5 percent this fiscal."
The International Monetary Fund (IMF), in its latest World Economic Outlook, projected an average growth rate of about 3.75 percent in market prices for India in 2013-14, which is expected to pick up to 5.1 percent next year.
India's GDP growth slowed to 5 percent in the year ended March 2013 from an average of 8 percent over the past decade.
Sharma said that due to increase in exports and decline in imports, trade deficit has reduced significantly.
"It is encouraging to see that trade deficit is also progressively coming down," he said in a statement.
India's exports grew 11.15 percent in September and imports declined 18.1 percent taking the trade deficit to 30-months low of USD 6.76 billion.
Pinning hopes on better farm output and various initiatives taken by the government to speed up implementation of infrastructure projects, Shukla said, "The economic growth would improve in the coming quarters."
Earlier in the day, Planning Commission Deputy Chairman Montek Singh Ahluwalia had refused to comment on IMF forecast.
However, he said: "I expect to see recovery in the coming quarters. Exactly how much it will produce is difficult to predict right now. But we are definitely on a turnaround path."
Ahluwalia said India's GDP will see a turnaround in the coming quarters on account of various steps taken by the government to spur growth as well as good agricultural production.
He said the government has taken steps to push the infrastructure sector and there are signs of improvement in the core sector production performance of steel, power, coal and cement during July and August.
Reeling under the impact of slowdown, Indian economy grew by 5 percent in 2012-13, the first year of the 12th Five Year Plan.
The first quarter (April-June) economic growth in this fiscal slipped to 4.4 percent from 4.8 percent the previous January-March quarter.