Even as the country’s economic expansion is likely to slip during the second and third quarters this fiscal owing to the adverse effect of a deficient monsoon and consequent drought in certain regions, Finance Minister Pranab Mukherjee on Monday maintained that there was no urgency to scale down the GDP (gross domestic product) growth target as the fourth quarter could make up for the shortfall.
In his opening remarks at an interaction with the Forum of Financial Writers here, Mr. Mukherjee said: “There is no reason to revise my target which I am expecting at six per cent plus. Whether it will be 6.5 per cent or 6.7 per cent, whether I will be able to retain last year’s [GDP] growth rate, I do not know. There may be some deceleration in second and third quarters... but the fourth quarter [growth] will make up.”
ADVERTISEMENT
ADVERTISEMENT
Despite a slide in growth from 6.7 per cent in 2008-09, the economy still managed to grow by 6.1 per cent during April-June this fiscal which happened to be a fast clip ever since the deepening of the global meltdown in September last year.
As per current reckoning, a plus six per cent growth during the July-December period may not be possible to achieve. Particularly disconcerting is decline in farm sector output which saw a lower growth of 2.4 per cent in April-June this fiscal as compared to three per cent in the like period a year ago.
On the positive side, Mr. Mukherjee pointed out that there were enough food stocks to tide over the situation. While the wheat season was to commence with a surplus of 17.7 million tonnes, the rice season would have a surplus of 14 million tonnes, he said.
ADVERTISEMENT
Alongside, while there are certain slow but steady signs of a pick-up in industrial growth, a revival in exports is likely to be a long haul.
Mr. Mukherjee pointed out that it was owing to the uncertain economic environment and the need for stimulus that he took a “considerable risk” of going in for huge borrowings and a fiscal deficit of 6.8 per cent of the GDP for 2009-10.
Noting that this could not go on for long, he also maintained that the stimulus measures would not be withdrawn all of a sudden. “I cannot give the people such a rude shock,” he said.