Finance Ministry today said Indian economy will grow by over 5 per cent in the current fiscal on back of high farm productivity and investments and promised more steps to boost growth.
"It (GDP) will be more than 5 per cent, it cannot be less than 5 per cent," Economic Affairs Secretary Arvind Mayaram said when asked about forecast by private analysts that growth could be lower than 5 per cent in 2013-14.
Mayaram exuded confidence that growth would improve in second quarter of current fiscal mainly on account of increase in the sown area, acceleration in the pace of plan expenditure and impact of projects cleared by the CCI.
"As we are seeing growth clawing back, I am quite sure that the environment will be conducive for further incentivising of growth and we will see whatever steps have to be taken," Arvind Mayaram said.
He said there has been signs of improvement in the manufacturing, electricity sector and capital goods sector in July and the eight core industries too showed a growth pick up of 3.7 per cent in August.
Arvind Mayaram said the growth of the consumer durables sector, which was negative in July, would pick up in the remaining quarters on account of festival demands.
The economy grew at a four year low of 4.4 per cent in the April-June quarter of current year. In 2012-13 fiscal the growth was at a decade low level of 5 per cent.
"The Q2 GDP growth should be better than first quarter... We need to incentivise growth... As far as the interest rate is concerned, it is completely the domain of RBI and Governor will take a call on that," Arvind Mayaram said.
RBI is scheduled to announce its second quarter policy review on October 29.
The Current account deficit (CAD), Arvind Mayaram said, was expected to be less than USD 70 billion or 3.7 per cent of GDP for the full fiscal.
Arvind Mayaram further said the "elevated level" of CAD at 4.9 per cent in June quarter is mainly due to gold imports which would be restricted below 800 tonnes this year. The imports were 845 tonnes last year.
"We would certainly hope CAD would be less than USD 70 billion. The CAD will be fully and safely financed without any recourse to dipping into reserves," he said.
On the impact of US shutdown,