Union Finance Minister Pranab Mukherjee on Friday said India would achieve over six per cent growth in this current fiscal despite drought.
He also said financial and economic reforms, which were a continuous process, is going in the right direction.
“In its previous term, the Congress-led United Progressive Alliance government clocked an average of eight per cent gross domestic product (GDP) growth rate. It was only in the last fiscal that it slipped to 6.7 per cent due to global economic slowdown and other factors. However, it would be difficult to predict (for the current fiscal) due to drought…. and if there is no major difficulty, the growth would be over six per cent in 2009-10,” Mr. Mukherjee said during an interaction with members of Editors Guild of India.
“Last fiscal was particularly difficult because of global financial crisis, high prices of petroleum products and high inflation rate. The two fiscal stimulus packages announced by the Prime Minister and subsequent incentives to various sectors in the wake of the meltdown helped arrest the fall in growth,” he said.
Referring to much-talked-about reforms agenda of the government, Mr. Mukherjee said: “Reforms are a continuous process. It is going in the right direction. There is no scope for anxiety about pursuing financial sector reforms.” Stating that the government had already cleared disinvestment in NHPC and Oil India, he said consultations were on with various ministries and disinvestment department on the issue. Expressing concern over high level of fiscal and revenue deficits, the Finance Minister said this was going to affect the financial consolidation programme.
Talking about the Centre’s development agenda, Mr. Mukherjee said that in this year’s budget, spending on development projects had seen a major increase for the first time, which had gone up by Rs. 82,000 crore to Rs. 3.25-lakh crore, an increase of 37 per cent.
“We had to do this so that it will increase development in rural sector and support consumer industry,” he said.
Mr. Mukherjee said experts have predicted that agriculture production would be down by 20-25 per cent because of drought.