"We might be able to achieve 8 per cent growth on our esteem ... if the world environment is favourable, we will be able to achieve high growth rate," the Chairman of the PMEAC, C Rangarajan, said.
While releasing the Review of Economy (2011-12), he said that the growth rate in 2011-12 is likely to be 7.1 per cent, marginally higher than 6.9 per cent projected by the Central Statistical Organisaton (CSO).
Indian economy was growing at over nine per cent before the financial meltdown of 2008 pulled down the growth rate to 6.7 per cent in 2008-09.
The economy recorded a growth rate of 8.4 per cent in 2010-11, which according to the CSO estimates is expected to moderate to 6.7 per cent in the current fiscal.
Rangarajan further said the efforts would be needed to achieve and sustain high growth rate.
Referring to inflation, which has remained at elevated level in 2011, he said it would moderate to 6.5 per cent by March end and 5-6 per cent in the next fiscal.
While the retail inflation based on Consumer Price Index (CPI) was 7.65 per cent in January, the Wholesale Price Index (WPI) inflation was 6.55 per cent.
Meanwhile expressing its opposition to the proposal of one PSU buying shares of others to help Government raise funds, the PMEAC said it was not desirable as this would reduce investible resources of the buying company.
"The proposal that was mooted to raise this (Rs 40,000 crore disinvestment) revenue by disinvesting the shares of public enterprises to other cash rich public enterprises was not a desirable option," Rangarajan said.
Unable to raise funds through sale of equity in public sector undertakings (PSUs) because of volatile market conditions, the Finance Ministry had mooted innovative ways, including cross holding by PSUs, to achieve Rs 40,000 crore target.
"This would have only reduced the investible resources of the enterprises and failed to convince market participants - who in any case mark down the reported deficits by all exceptional items, i.e. one-off items such as divestment proceeds and other asset sales, including spectrum auctions," the review said.
Under the cross-holding route, shares of a PSU were to be sold to other cash-rich firms of the Government.
The Government till date has only managed to garner Rs 1,145 crore through the disinvestment route against the target of Rs 40,000 crore due to volatile market conditions.
It is currently in the process of working out the modalities for auctioning its five per cent stake in ONGC that would fetch the exchequer around Rs 12,000 crore.
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