Growth outlook possible after Q1 data: Pranab

Mumbai: Finance Minister Pranab Mukherjee on Saturday said that the government will have to closely monitor various sectors of the economy before it is in a position to assess the outlook for this fiscal.

"When the first quarter figures will be available to us–it is just one-and-a-half months that have passed–then it will be possible for us (to assess the target)," Mukherjee said.

"Various viewpoints are being expressed about growth.

That is why we have to very closely monitor the growth of various sectors," Mukherjee told reporters on the sidelines of a Union Bank of India function here.

The RBI in its monetary policy on May 3 has pegged the economic growth for 2011-12 at 8 per cent as against 8.6 per cent growth in the previous year.

The minister admitted there were inflationary pressures weighing on the economy, which may compromise its medium-term growth prospects. He said inflation was an area of concern with regard to growth and the government was addressing it.

To tackle the uncomfortable inflation–which rose to 8.66 per cent in April– the Reserve Bank has been aggressively hiking its key rates to discourage demand. It raised the lending rates by an higher-than-expected 50 basis points on May 3.

The rising commodity and crude prices have forced many analysts and economists to revise the global economic outlook, including that of India, which imports nearly 80 per cent of its oil needs. The global crude prices have breached USD 125 a barrel though since the past fortnight it has been ruling around USD 110 a barrel.

Following this, international agencies, including the International Monetary Fund (IMF), have revised downward their growth forecasts for the country. The IMF early this month had projected 8 percent growth for 2011.

The IMF downgrade, Mukherjee said, was not "unusual" and the Reserve Bank had already studied it.

Mukherjee, however, added that against a very grim situation in the developed world, India for the past two years has been on a path of fiscal consolidation and is taking steps to bring inflation to acceptable levels and grow fast at the same time.

"Most countries are suffering from slow growth…Europe is not fully recovered, major countries are also taking serious measures like quantitative easing, injecting liquidity," he said.