RBI optimistic of Indian Growth

Author: MP Rana

The Central Bank said that despite disturbances in almost every sector in the financial markets, the growth rate in India is the highest among all the nations. The downfall being observed in the core infrastructure sector is more of a cyclical downturn, therefore less likely to affect the economy as structural drivers of growth are intact.

The declarations were made during the review of Credit Policy that is done on a quarterly basis. A comparison between the previous and current year’s growth rates revealed that industrial production stood at 10 percent in April-August 2007-08 whereas in the present quarter it is merely 4.9 percent. The fall can be attributed to lows in Industrial and Electricity sectors.
	Also, the core infrastructure sector showed a growth rate of 7.1 percent in previous year in the same period but in the current year, it stands at 3.4 percent. This decline is because of the declining performance of electricity and petroleum refinery products. The services sector managed to grow moderately with a double-digit magnitude. Net Profits of Corporate companies too showed a dip. In the first quarter of present fiscal, the value stands at 8.2 percent whereas in the previous year, it was 33.9 percent. This is because of the pressure exerted soaring interest payments and staff costs.