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‘India’s economy to grow 8% next year’

NEW DELHI: India’s economy will grow by eight percent next year and could return to nine percent the following year as the global economy picks up, a top government policy adviser said Wednesday.

The Indian economy, which was expanding by nine percent before the global financial crisis hit, is expected to grow by 6.5 percent this year, said deputy head of the Planning Commission Montek Singh Ahluwalia.

“It will be a year of slowdown as a result of global developments but we will still have the world’s second-fastest rate of growth (after China),” said Ahluwalia. Ahluwalia, a close adviser to the prime minister, was speaking at the annual Economic Editors’ Conference in New Delhi. The driest monsoon in nearly four decades, which has hurt agricultural output, has also dragged down growth for the fiscal year to March 2010.

But the planning commission said as long as the annual rains are normal next year and the international economy continues to pick up, India will log eight percent growth next year and nine percent the following year.

The government says India needs at least nine percent growth to reduce crushing poverty. Ahluwalia’s upbeat assessment came as Commerce Minister Anand Sharma forecast that exports, which have been on the decline for the past 12 months, should start turning around by the end of the current financial year.

“We are on the way to recovery. In the final quarter of this fiscal year, we will see positive (export) growth,” Sharma told reporters at the same media forum.

India’s exports fell by 13.8 percent in September to $13.6 billion from a year earlier, data released the previous day showed.

But the export decline was smaller than the 19.4 percent fall logged in August, signalling the damage to trade from the global downturn could be easing, economists said. afp

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