Poor monsoon may dampen growth prospects in 2009-10: PMEAC
New Delhi: Poor monsoon will have a dampening effect on the country's economic growth rate and it could slide to six per cent during the current fiscal, Prime Minister's Economic Advisory Council (PMEAC) C Rangarajan said here on Monday.
"It (poor monsoon) will have a dampening effect on growth... my own estimate is that the economy would grow between 6 percent and 6.5 percent," Rangarajan said on the sidelines of a book release function.
However, he added, the impact of poor monsoon may not be very severe on the economy as agriculture now contributes only 18 percent to 20 percent of the GDP).
Having grown by about nine per cent for three consecutive years, the economic growth rate fell to 6.7 percent during 2008-09, mainly on account of the impact of the global financial meltdown.
Reserve Bank also in its quarterly review of the monetary policy has projected six percent growth during the current fiscal with upward bias.
On being asked about inflation, which is in the negative territory for the last few weeks, Rangarajan said, it would rise in the coming months and would reach close to 5 percent by the end of the current fiscal.
The book "India: Monetary policy, financial stability and other essays" written by Rangarajan was released by RBI Governor Subbarao.
On the rising prices of food articles he said, there is sufficient wheat and rice stocks and it should be used in the manner that the prices should come down.
"We have to make a decision on how to make use of the stocks available. We have significant amount of stock available with us both wheat and rice... We have to make use of the stock in the manner at which the prices will come down," Rangarajan added.