In spite of the pessimism surrounding the global economies, Indian policy makers right from the beginning of the current fiscal have been optimistic about higher economic growth rates in India. Policy makers, industry bodies and associations all claimed that this year the growth rates will be around 6-6.5 percent though this is comparatively low for a developing economy. Citing different reasons, everyone have agreed that the growth rate will be around 6 percent withholding the war tensions with Pakistan.

Perhaps the core sectors have listened to what the policy makers are saying and came up with an impressive growth in the first quarter of the current fiscal. Most of the predictions have been based on the fact that a good monsoon is in the offing. The basis for the optimism lies in the fact that the industry has shown an upswing by posting a higher 3.8 percent growth in the first two months. Also growth in the agriculture sector remained high and inflation was around 2 percent only. The Finance Minister and RBI have expressed their satisfaction over the growth rates and feel that the targeted rate of economic growth can be achieved.

If this growth is any indication of the future potential, then there are no doubts in the minds of the policy makers that the Indian economy is surging ahead. However, a single quarter performance may not be apt for predicting the achievement of targets. There is a divergence of opinions now especially after the impressive performance of the core sectors. Some refer to this as an indicator while others feel that this is only a short-term phenomenon and is based purely on the cyclical factors of the industry and does not indicate a strong growth potential.

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