Prime Minister Manmohan Singh today said the economy is expected to register a growth rate of 7.5 per cent in this financial year (2009-10), up from 6.7 per cent a year ago.
“In the current financial year, the growth rate of economy is likely to be 7.5 per cent,” he said while addressing a meeting of the Chief Ministers on price rise here.
The economy, which had been growing at over 9 per cent, slipped to 6.7 per cent in 2008-09 following the impact of the global economic crisis triggered by the fall of investment bank Lehman Brothers in September 2008.
Driven by stimulus packages and easing of monetary policy, India’s economy during the second quarter (July - September 2009-10) expanded by 7.9 per cent, much more than anticipated by any analyst or think tank.
The RBI in its recent review of the monetary policy too projected a growth rate of 7.5 per cent for the current fiscal.
Finance Minister Pranab Mukherjee, while presenting the Mid-Year Review of the Economy had said that economy could grow in excess of 7.75 per cent despite the impact of drought and floods on agriculture output.
The Prime Minister further said that last year was dominated by the concern to protect the economy from the effects of the global economic slowdown and the government has done well on this front by acting swiftly.
“The Government acted swiftly and I am happy to say that we have done fairly well on that front. At a time when the industrialised countries experienced a sharp decline in output we have only seen a modest deceleration and the growth rate in the first year of the global crisis 2008—09 was 6.7 per cent,” he added.
He said that the Government has greatly expanded public spending in rural areas, especially in employment intensive activities, and it has helped creating rural income.
“I am particularly happy to say that we have also been able to protect the inclusiveness of the growth process to a large extent. The National Rural Employment Guarantee Act has been a central instrument for supporting income of the poor in rural areas,” the Prime Minister added.