Slow growth, lack of jobs and rupee depreciation remain a matter of concern for the Indian economy. But the economy will rebound because of strong fundamentals, President Pranab Mukherjee said on Saturday.
Speaking at the 160th anniversary celebrations of the Bengal Chamber of Commerce and Industry, Mukherjee pointed out that India’s growth had been impacted following the global financial crisis of 2008-09.
Following a slump in GDP to 6.7 per cent in 2008-09 from 9 per cent earlier, the Indian economy saw consecutive growth in FY10 and FY11, of 8.7 per cent and 9.3 per cent, respectively.
“After that, there was again a slump because the world did not recover from the 2008-09 crisis. Most of the developed economies of Europe, North America and Japan were slow-moving and fragile. Even the Emerging economies (Brazil, China, South Africa) were registering slow growth. India is no exception to this global scenario,” he said.
According to Mukherjee, while there were areas of concern (in the economy), there is “no room for gloom”. Corrective measures had earlier been taken in the ‘80s and later in the ‘90s. Such measures did put the country back on the growth path.
“Certain fundamentals are strong and while some corrective action is necessary, there is no room for despondency,” he said.
Signs of Revival
The President said that his recent discussions on a possible economic revival with Prime Minister Manmohan Singh lent some optimism.
Recent reports of economic recovery in developed nations such as North America held out signs of confidence. The EuroZone crisis too seems to have eased. Hopes are being pinned on German Chancellor Angela Merkel for a possible turnaround (in Germany).
In India, good monsoons will have a positive impact on agricultural growth and food prices. Inflation is likely to come down.
“Our experience in the recent past has shown that we have to live with adversities whether it comes from the external or the domestic sector,” he said.
Stressing on steps required to improve performance of the manufacturing sector, Mukherjee said the sectoral share of manufacturing in the GDP has remained at around 16 per cent since the 1980s.
Accordingly, increasing competitiveness of the sector was crucial to achieving the target of taking its contribution to GDP to 25 per cent, he said.