The Chairman of the Prime Minister's Economic Advisory Council, Dr C Rangarajan on Thursday said that the Indian economy is expected to grow by 8 per cent in the current fiscal. He said, there are some concerns about the industrial production which has led to revision of the growth rate from the earlier expected 8.2 percent. The Industrial output growth slumped to 3.3 percent in July this year, the lowest in 21 months. Dr Rangarajan said that maintaining high growth rate is essential to reduce poverty and improve the standard of living of the people.

Emphasizing the need for inclusive development, Dr Rangarajan said that the disparity between the growth rates of various states in the country need to be converged. He was addressing the Golden Jubilee celebration of the Indian Economic Service at a function in New Delhi. Dr Rangarajan said that tackling inflation and bringing it below the five percent level is the biggest challenge the economy faces on Thursday. Stating that the present rate of inflation is a cause of concern, Dr Rangarajan said that interventions in the foodgrains market alongwith effective use of fiscal and monetary policy are the key to address rising prices.

Addressing the gathering, Chief Economic Advisor to the Ministry of Finance, Kaushik Basu said that the present global turmoil will not have any adverse impact on India as the economy is backed by sound economic policies and has huge underlying strength. Mr Basu said that although the industrial growth has performed poorly in the last few months, long term prospects are very bright.