Indian Economy to grow at 5.5% in current fiscal: PM

New Delhi: Indian economy will grow at about 5.5 per cent in the current fiscal and the first quarter numbers are expected to be relatively flat, Prime Minister Manmohan Singh said on Friday.

"I believe this year, growth rate will be about 5.5 per cent," he said in his reply to a debate on the state of the Indian economy in the Rajya Sabha.

The economic growth slowed to a decade low of 5 per cent during the 2012-13 fiscal on account of poor performance of manufacturing sector.

In the Budget, the government had projected economic growth for the current fiscal at between 6.1-6.7 per cent.

Singh said the government has taken measures to revive growth, the results of which would be visible in the second half of the fiscal, even as the first quarter (April-June) growth will be relatively flat.

"Growth has slowed in recent quarters. I expect growth in the first quarter of 2013-14 to be relatively flat, but as the effects of good monsoon kicks in, I expect it to pick up," he said.

The GDP figures for first quarter are scheduled to be released at 1730 hrs today. The growth in the first quarter of last fiscal was at 5.5 per cent.

In order to boost growth, the government has taken a number of initiatives including setting up of Cabinet Committee on Investments (CCI) for reviving stalled projects.

Since January 1, the CCI has cleared projects worth over Rs three lakh crore this year.

"In fact, we have the ambition, we have the means, we have the resources and the will power to put the economy back on the realms of high stable growth of 6-8 per cent in two to three years to come," he said.

He dismissed fears of GDP growth rate coming down to 3 per cent, saying that it was "entirely unfounded."

Admitting that there may be short term shocks to the economy, the Prime Minister said, "we need to face them. That is the realty of a globalised economy, whose benefits we have reaped."

He said: "We need to ensure that the fundamentals remain strong so that India continues to grow at a healthy rate for many years to come. That we will ensure."

Pointing out that the country is faced with challenges, the Prime Minister said "…but we have the capacity to address them. It is at times like these the nation shows what it is truly capable of."

Listing out the growth friendly measures — fuel subsidy reform, liberalising FDI norms in various sectors, and resolution of some tax issues of concerns to industry– taken by government in last six months, Singh said the effects of these will come into play over the year resulting in higher growth, particularly in manufacturing.

After growing at over 8 per cent for two consecutive years, the growth slowed to 6.2 per cent in 2011-12 and further to 5 per cent last year on account of poor performance of farm, manufacturing and mining sectors.