The Economic Advisory Council (EAC) to the Prime Minister of India today estimated a GDP growth rate of 6.7 percent in 2012-13.Releasing the Economic Outlook 2012-13, EAC chairman C. Rangarajan today said the Construction and Services sector are expected to show some improvement. In the Farm sector, the GDP is expected to grow at mere 0.5 percent in 2012-13 owing to the impact of week monsoon. The EAC added that deficient South West Monsoon is likely to have an adverse impact on prices of primary food items also. The inflation rate at the end of 2012-13 is expected to be within the range 6.5 to 7 percent. The EAC noted that the declining trend in investment and savings rate are a matter of great concern.

Suggesting a host of measures for accelerating the Economic growth, the council has recommended Foreign Direct Investment in multi brand retail up to an extent of 49 percent to attract investment. It further said that in civil aviation, the existing FDI limit of 49 percent should be allowed for Foreign Airlines as well. The EAC also suggested measures for containing petroleum products subsidies including a suitable increase in the price of diesel in one or more steps.

The Prime Minister in his Independence day address had projected India's economic growth in the current fiscal to be a little higher than 6.5%.Government’s optimism on growth front comes at a time when a host of major private forecasters including Crisil and Moody's had trimmed the forecast of GDP growth to as low as 5.5%.