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Economy to grow over 6% this fiscal: RBI

Asserting that the prospects of Indian economy was bright, the Reserve Bank of India on Friday said GDP will grow by 6-6.5 per cent during this fiscal and interest rates will continue to remain soft.

"The RBI's estimate is 6 to 6.5 per cent growth for the current financial year," RBI Governor Bimal Jalan told reporters after a meeting with Finance Minister Yashwant Sinha in New Delhi.

He said the liquidity condition was comfortable and was "puffed up".

On the inflation front, the governor said there was nothing to suggest any inflationary pressure.

Jalan said the prospects of the economy was bright with no balance of payment problem, comfortable foreign exchange reserves and high growth in IT and other sectors, he said.

" I think prospects for India has never been better in terms of potential. But there are problems that we have to get over". Jalan said.

Asked about the burgeoning fiscal deficit, he said: "These are not overwhelming problems. It can be controlled and it is upto us".

On the external sector, he said, after independence 36 out of 45 years the country had balance of payments problem. "Now you don't hear about a balance of payment problem", he said.

"If you look at the inflationary scenario, it is one of the best that has happened in the last three decades", Jalan said.

Even the foreign exchange reserve at over $55 billion was one of the highest, he observed.

"If you look at the IT sector, no one has done as well as this sector in terms of global exposure and reach and entrepreneurship," he said.

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