PM Economic Panel says that it expect GDP growth of 8.2% in FY11, and 9% in FY12. It sees FY10 GDP growth at 7.2% with upward bias. The panel says that the possible reduction of fiscal deficit is by 1-1.5% in FY11. It expects current account deficit at 2.2% of GDP in FY10.

The panel sees consolidated fiscal deficit of 10.3% in FY10. Capital flows are seen of Rs 48.5 billion in FY10. It sees FY10 trade deficit at $ 128 billion. The panel says that it is feasible to reduce expenditure/GDP ratio by 1%. Danger of food inflation is spreading to other sectors.

The panel says that April 1 GST rollout deadline is not realistic. RBI must move to neutral position as soon as possible. Fiscal deficit is unsustainable, and needs to be consolidated soon. The panel feels that there is scope for government to reduce expenditure. Budget should announce measures for GST, it added.

Dr C Rangarajan of PM Economic Panel said that March end WPI is seen at 85%. He feels that a hike in service tax is a difficult choice and it can be taken to 12%. Central borrowing can be slightly lower than Rs 4.5 trillion in FY11. Fiscal deficit can be brought down to 5.5% in FY11. He feels that RBI action would depend on price situation. He is expecting GST rollout in April 2011.