I expect GDP of India between 8.5 to 9 % in compare to the GDP rate of 9.5% announced by IMF. Reason behind is food inflation of India and many others like international crude oil prices ($78.57 per barrel on 21^st July 2010). According to the new ruling of Indian govt. of control free fuel prices in India, prices of petrol and diesel may increase in Aug 10. Other raw material cost is also increasing for industries. Current example is increase price of lakhtakiya car Nano, now Nano is not lakhtakiya its new prices are hiked 4% for earlier price. Food inflation of India on July 10, 2010 was 16.48%.

India’s farm sector is likely to grow by 3 – 3.5 per cent annually during the 11^th Five – Year Plan ending 2011 – 12. In current fiscal year, we may get improved growth rate of agriculture 4.5% (according to the Prime minister’s Economic Advisory Council). But this growth rate is very low in compare to the industrial and other growth rates; those are expected to rise in 2 digits.

These are some bad factors about Indian economy; those are going to affect both common man and as well as to industries also. Because of the above mentioned reasons manufacturing cost for the firms will increase, which will ultimately decrease buying power of consumer.

We also have some good figures to smile. These figures supports high growth rate of India like industrial growth rate in two digits from more than half year (11.5% in May 2010). Indian exports remained robust with a 30.4 per cent annual growth in June 2010 at $17.75 billion. These increasing figures will help India to grow on GDP more than 8.5%.

According to RBI’s current report, service sector of India would get growth of 9.1 percent. Now days services are also important part of products also and we have lot of scope into core service sector. So these both points give us good sign of growth.

In fiscal year 2008 – 09, when world faces very big economical crises, we got Financial Direct Investment (FDI) of $27.30 billion. This figure is expected to increase till $30 billion this year. Both the figures are showing good sign for Economy of India.

It is also expected that we may get GDP of 10% in next fiscal year. This is supported by fast growth rate of India by IMF and also fast recovery of rest world from economical crises. This is also necessary to consider that world economy is expected to grow with less than 5% GDP.

In census 2001 urban population of India was 28.61 crore in compare to the total population of India 102.87 crore, it means still most of the population of India is living in rural area, this area is still undeveloped. So if it is possible to achieve this target of 8.5% GDP, then also most of the Indian are so far from development. This GDP figure is actually growth rate of rich people. This will increase gap between poor and rich people of India.

I can understand the problem of RBI on monetary policy of India. RBI again raise repo rate by 25 bps and reverse repo rate by 50 bps to decrease inflation. But according to me these steps will not work for common man. These steps will cause of increasing loan rates for common men and may be for corporate also. Already industries are in fear of less demand, reason behind is common men is having disposable income in its hand and where as because of increased manufacturing and transportation cost industries are bound to increase prices or decrease quantity in same price.

New base rate policy of banks in India according to the guidelines of RBI already reduced low interest rate loans. So except improving export rate (expected to rise 18.6%) there are no good sign from domestic market.