The Indian economy is coming out of the slowdown and the country must return to the path of fiscal prudence, Prime Minister Manmohan Singh said on Tuesday. The government also assured that in its remaining tenure, new frontiers and new directions to strengthen country’s economic and social foundations will be sought.
The UPA government is expecting the trillion dollar plus economy to grow by 8.5% in the current fiscal and ?the recovery testifies to the success of the government’s strategy of macro economic management,?said Singh while releasing the report card on the performance of UPA-II in the first year of its second tenure. Giving further credence to the success of fiscal and monetary measures adopted by the policymakers, India’s economy grew by 8.6% in three months leading to March,data released by the government on Monday showed.
The government accepts in the report that the rising prices,caused by a combination of external factors and the drought have become ?a matter of concern.? The report also assured that the government would take corrective steps to contain the soaring inflation. Headline inflation was at 9.59% in April, coming off a 16-month high of 10.1% in February. Food inflation, which refuses to ease despite the steps taken by the government, is staying in double digit territory for the last 18 months.
The sovereign default crisis in the euro zone and its impact on the recovery in global economy may take a toll on India’s resurgent growth. ?I look at the year ahead with cautious optimism due to uncertainties in the horizon,?said Singh.
