The Finance Minister, Mr Pranab Mukherjee, today expressed confidence that India will be able to achieve 8 per cent growth this year, even as he noted that the global economic environment remains an area of concern.
“We will have 8 per cent growth even this year though the first quarter growth figure is 7.7 per cent,” he told reporters here after meeting leading Indian industrialists at an investment forum.
He said a good monsoon could ensure agricultural growth of about “4 per cent-plus” and growth in the manufacturing and services sector “clearly indicates that it will be possible for us to have the growth at around 8 per cent for this year“.
Mr Mukherjee said India has projected 9 per cent growth for the 12th five-year Plan (2012-17) and the country is taking necessary steps to ensure that the momentum continues.
On the outlook for the rupee, he said the Reserve Bank of India is “watching the situation”.
“The RBI Governor has made it quite clear that as and when the situation warrants, the RBI will intervene. Right now, there is no such situation,” he added.
Mr Mukherjee pointed out that the international environment is an “area of concern”, particularly the high ratio of sovereign debt to the GDPs of euro zone nations and the slow pace of recovery in industrialised countries.
He added that inflationary pressure and forex volatility in emerging markets is “posing serious concerns, but at the same time, as the collective leadership of the international community has been able to address the problems (that) arose out of 2008 crisis, we will be able to overcome this current crisis,” ensuring that India’s growth will be 8 per cent-plus.
Mr Mukherjee will be in Washington for the IMF and World Bank’s annual meeting as well as a meeting with his counterparts from the BRICS (Brazil, Russia India, China and South Africa) grouping, where the countries would review the global situation and try to work out a common approach to issues that will be debated in the IMF-World Bank meeting.
“We will also discuss our strategy in respect of the Euro zone crisis,” he added.
He said the BRIC leaders would exchange views and these will be reflected in a communique that is currently being drafted.
Later, speaking at a USIBC event, Mr Mukherjee said no country has remained immune to the fallout of the global financial crisis in 2008.
Though the economic downturn was moderated and growth resumed in the second half of 2009 in most economies, the pace of recovery remained uneven.
Advanced economies grew more slowly than before, while fast emerging economies like India and China showed the way for the rest of the world.
“There is wide-spread apprehension that even the tepid global economic recovery that we have seen so far is stalling.
Slowing global aggregate demand, the unresolved euro debt crisis, high commodity and oil prices, inflationary pressures and stressed currencies have shaved 1-1.5 per cent off the global GDP in the past 6-8 months,” he said.