Global problems, high int rates pulling down growth:FM

India still front runner in terms of growth of GDP

PTI | December 20, 2011



Attributing the slowdown to the Reserve Bank's tight monetary policy and global problems, the government on Tuesday informed parliament that economic growth in 2011-12 will moderate to 7.5 per cent, from 8.5 per cent in the previous fiscal.

"The slower-than-expected growth this year could be attributed to global slowdown, which has resulted in slowing down of growth rate in many countries, including India, as well as to tight monetary policy to control inflation," minister of state for finance Namo Narain Meena said in a written reply in the rajya sabha.

Although the economic survey in February had expected a growth rate of 9 per cent for the current fiscal, the mid-year analysis 2011-12 tabled in parliament recently lowered the growth projection to 7.5 per cent, he said.

"While the economy is expected to slow down in the current year from the levels achieved in 2010-11, India is still among the global frontrunners in terms of growth of gross domestic product (GDP)," Meena said.

The government has been pursuing prudent macroeconomic policies on a ongoing basis to obviate the impact of global financial crisis, he said, adding that the efforts were also being made to strengthen financial markets and increase social spending to protect poor.

The specific measures taken by the government recently to promote growth include "creation of infrastructure debt fund, focusing on public private partnerships, announcement of new manufacturing policy, announcement of draft telecom policy, introduction of land acquisition bill in parliament, and a number of legislative measures to develop banking sector in India", he added.

Meena said the Indian economy grew at an average annual rate of more than 9 per cent between 2005-06 and 2007-08. The growth rate fell to Rs 6.8 per cent in 2008-09 on account of global financial crisis, but recovered the momentum to 8 per cent in 2009-10.

"Even during 2011-12, which has been a relatively difficult year with the growth rate slowing down to 7.3 per cent in the first half (April-September), India is still among the global front runners," Meena said.

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