Endorsing the Economic Survey’s emphasis on the farm and the infrastructure sectors for achieving higher economic growth, Finance Minister Pranab Mukherjee said inflation and widening current account deficit remain major areas of concern.
“Inflation is a matter of great concern, no doubt. Just one year ago in February 2010 food inflation was as high as 20.2 per cent...though it is high it has come down in January ... still it is an area of concern and we shall have to work on it, particularly in the context of global economic crisis,” Mr. Mukherjee told reporters here.
Inflation stood at a high of 8.23 per cent in January.
After touching a high of 18.23 per cent in December, food inflation came down to 11.49 per cent in mid-February.
Inflation is forecast to be higher with pressure on commodity prices due the ongoing turmoil in the Middle-East.
On current account deficit, he said, “Another major area of concern in current account deficit.”
Current account deficit widens when imports of goods, services and transfers exceed their exports. It is projected at 3 per cent during the current fiscal.
The finance minister said the Survey has done a good job. .
“(It) has correctly emphasised on the need of making more investment in agriculture, infrastructure, social infrastructure,” he said.
On industrial output, he said though there is a variation in index of industrial production (IIP) in the recent months, it requires substantial investment so that industries continue to make its contribution to GDP.
He said the Survey has been able to critically analyse various options.
The Economic Survey 2010-11 has some speciality. “If you go through it, you will find one chapter that is on services and I think it is appropriate because contribution of service sector in our GDP is expanding,” he said.
The Survey has pegged the economic growth at 8.6 per cent in 2010-11 and 9 per cent in the next fiscal.
It projected the gross fiscal deficit at 4.8 per cent of GDP in, down from 6.3 per cent last year.