NEW DELHI: Prime Minister's Economic Council on Wednesday said that the global economic and financial conditions were likely to remain under pressure during the year and as a result, the economy was estimated to grow in the range of 7.5 per cent to 8 per cent in 2012-13.
The council said that the overall farm sector growth for 2011-12 would average 3 per cent. Therefore, it was important to keep a vigil on food prices and focus on production as well as rolling out of adequate food logistics network.
Inflationary pressure would continue to ease through 2012-13 and remain around 5-6 per cent for the year, the council said. The country needed to make adjustments on sale of refined petroleum products to reduce the huge subsidy burden. The council reiterated that there was a greater need to invest in infrastructure in coal, power, roads and railways.
The current account deficit in 2012-13 is estimated at 3.0 per cent of GDP. The council said that efforts were required to keep the current account deficit between 2.0 to 2.5 per cent over the medium term. The government must effectively lay out a road map to achieve fiscal consolidation, the council advised.
The council recommended that capital inflows in the form of equity must be encouraged along with improved conditions for investment and growth. The government borrowing programme must not affect the financing needs of the private sector, the council said. For the overall macroeconomic stability, attention must be paid to prices, exchange rate and fiscal balances.
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