NEW DELHI: The government today estimated the economy to grow by 7.2% in financial year 2009-10, against 6.7% a year ago, despite contraction in farm production.

The projected GDP figure for the current fiscal, as put out by the advance estimates of the Central Statistical Organisation, is lower than the Reserve Bank and the Finance Ministry's forecasts.

The Finance Ministry pegged GDP growth at 7.75% in the mid-term economic review, while the RBI projected the economy to grow by 7.5% in its quarterly monetary policy review last month.

However, the economy is likely to grow at a higher pace in the second half than 7% in the first half.

According to the data released today, agriculture and allied activities are, however, projected to shrink by 0.2% this fiscal against 1.6% a year ago.

The projected growth this fiscal is likely to be driven by 8.9% expansion in the manufacturing sector against 3.2% a year ago. This sector in particular had got various stimulus doses from the government in the wake of the global financial crisis.

High lights

Montak Singh Ahluwalia, Deputy Chairman, Planning Commission
Hope to do much better than 7.2% in FY11
FY10 GDP growth numbers are good
FY10 agri-sector output estimate better than expected
Should start winding down stimulus steps
Stimulus will be unwound at an appropriate pace
7.2% growth estimate shows stimulus has worked
Worst over on food grain prices
Expect food grain prices to soften
 
Ashok Chawla, Finance Secretary
Expect FY10 GDP estimate of 7.2%
Price situation is a matter of concern
Expect agri-output to be better in Q4
Centre, states agree on steps to tame inflation
Expect FY10 agri-output to be same as FY09