PMEAC pegs economic growth at 6.7 percent for 2012-13

New Delhi -  The Prime Minister's Economic Advisory Council (PMEAC ) today pegged GDP growth for the current fiscal year at 6.7 percent.

Dr. C. Rangarajan, Chairman, Economic Advisory Council to the Prime Minister, who released the document 'Economic Outlook 2012-13' here today, however, mentioned that the inflation rate  expected to be within the range of 6.5 to 7.0 percent at the end of 2012-13.

Referring to the farm sector, Rangarajan said: "Farm sector GDP projected to grow at 0.5 per cent in 2012/13 due to the impact of weak monsoon on agriculture and the current reservoir  storage position in 2012/13."

Referring to manufacturing sector, Rangarajan said: "Manufacturing sector projected to grow at 4.5 per cent. Electricity, automotive, steel and cement sector have shown improvement in the  period of April-June. Because of the benefits of the low base, manufacturing sector will show improved performance in the second half of this year."

On mining sector, he said: "Mining sector for the year as a whole expected to grow at 4.4 per cent due to growth in the coal and lignite sector, and some recovery in iron ore.

Rangarajan also suggested a host of measures like allowing FDI in multi-brand retail and a big push to infrastructure spending to accelerate economic growth.

"For channelling transfer of capital and technology, FDI in multi-brand retail up to 49 per cent may be allowed to attract investment in this sector. Such of the states as are receptive to the  idea may implement this," he said.

Further commenting on the aviation sector, Rangarajan said 'FDI in civil aviation may now be allowed to the existing extent of 49 percent for foreign airlines as well'.

Referring to oil sector, Rangarajan said: "Given the huge subsidy projection for the current financial year, priority consideration may be given to a suitable increase in the price of diesel in  one or more steps, and a cap on the level of consumption of subsidised domestic LPG close to what is currently being consumed by poorer households, i.e., 4 cylinders."