Indian economy set for high growth again: Pranab Mukherjee

The Indian economy is regaining the growth momentum of the pre-crisis years and is well on its way to achieving a near-9 per cent GDP growth in the current fiscal. The Indian economy, which grew at a slower pace of 6.5 per cent in 2008-09 and a comparatively faster 7.4 per cent in 2008-09, has further consolidated GDP growth in the current fiscal with an a growth rate of over 8.8 per cent in the first quarter.

This is in line with the projections of the Economic Survey of a growth rate of 8.5 ± 0.25 per cent in 2010-11, finance minister Pranab Mukherjee told the Economic Editors Conference in New Delhi today.

He said the Indian economy would be back on the pre-crisis growth curve by the next financial year (2011-12). He attributed the upswing to a number of factors, including timely impact of various fiscal and monetary policy measures, the underlying fundamentals of the economy and the general, though still weak, recovery of the global economy.

Mukherjee said the current growth is more broad-based with growth improving in all the three sectors - industry, service and agriculture. The fact that this growth came about in a year with sub-normal monsoon reflects the strengths of our economy's fundamentals and its underlying dynamics, he added.

A decline in the share of agriculture in GDP has only made the Indian economy more resilient to cyclical changes while, at an aggregate level, the compositional changes within the agriculture sector are able to counter balance the impact of rainfall deficit, Mukherjee pointed out.

Also, unlike in the past, a major deficiency in monsoons may not necessarily lead to a negative growth/decline in India's agriculture production, he said.