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India growth below 6% in 09-10 remote possibility: RBI
Posted on: 23-04-2009 , 04:: | DY365 Bureau

Governor D Subbarao today said it is only a remote possibility that India would record less than that.

"No, there was no (political) pressure. It was our best professional judgement that growth in 2009-10 will be 6 per cent and that’s the number we put...And based on available evidence and available judgement, I would believe that getting below 6% is a remote possibility," Subbarao told news channels here.

He said unlike in the January credit policy review, when the RBI pegged India's growth at seven% for 2008-09 with a downward bias, there is no bias this time around.

"If indeed we thought there was a bias, we would have put it in there like we did in the January policy statement. But there is less uncertainty to this number of 6%," the RBI Governor said.

He said there was a lot of debate within the RBI on what the growth rate would be for this fiscal. "Having reflected on the various growth models that our people have worked on and having talked to people and listened to (them), we determined that the growth estimate will be 6 per cent for 2009-10," he said.

The Indian economy grew 6.9% for the first nine months of the last fiscal, after growth significantly slowed to 5.3% in the third quarter.

Subbarao ruled out dilution in the present limit on  banks'exposure to infrastructure and advised infra firms to diversify their funding requirements from the banking sector. He said the limit on a bank to extend loans to a group of infra firms is 45% of advances.

"So they (the limits) are already quite liberal. I do not believe there is scope for relaxing this further," Subbarao said. "That does not mean that infrastructure finance should be held up or held hostage to this condition (the present caps). There are ways of getting around it. We have told infrastructure project implementers that they must diversify the banks that they are going to take credit from," he added.

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