Indian economy likely to grow around 6.5%: Rangarajan

The prime minister's economic panel today said the economy is likely to grow by around 6.5% in the current fiscal, a bit slower than 6.7% a year ago, due to a decline in farm production because of a deficient monsoon.

"I think, we are providing for fairly substantial growth rate in industrial production and also in the services sector, even some decline in the agricultural growth rate; 6.5% appears to be a reasonable growth rate," prime minister's Economic Advisory Council chairman C Rangarajan said.

Rangarajan said his estimate is that the economy would grow between 6 and 6.5% in the current fiscal. "Perhaps it would be closer to the upper end of my range," he said at a seminar on the state of the macro economy.

If the Indian economy grows by around 6.5% this fiscal despite some decline in farm production, economic expansion would be lower than last year's but quite reasonable as global financial crisis had considerably slowed down economic growth since September, 2008.

After the collapse of US financial services icon Lehman Brothers, the economy could manage a growth of 5.8% in the last two quarters of 2008-09. In the first quarter of this fiscal, it grew by 6.1%.