Allaying fears of any immediate sharp cuts in government spending to target inflation, finance minister Pranab Mukherjee on Tuesday said the government would continue its efforts to get Asia?s third-largest economy back on 9% plus growth trajectory. But, with uncertainties remaining on the global economic growth and country?s industrial growth showing signs of moderation, the finance minister was cautiously optimistic while projecting a double- digit growth in the years to come.
?I will not say we are still out of the woods?The immediate task before us is to quickly revert to the GDP growth path of 9% and then find the means to cross the double-digit growth barrier,? the finance minister said at an event organised by UTI AMC in Mumbai.
The annual expansion in the trillion dollar plus Indian economy had slowed down to 7.4% in the financial year ended last March as the global financial meltdown and worst monsoon rains in more than 37 years threw a spanner in the growth engine. ?In the span of 12-18 months, India had to face a crisis of commodity prices, a crisis in energy prices, the financial meltdown and the adverse impact of a drought,? Mukherjee pointed out.
A loose monetary policy followed by the central bank kept the key policy rats at record lows and the fiscal boost given by the government through cuts in indirect taxes helped in putting the economic growth back on track. Steps like these would be the key to the further growth, the finance minister remarked.
?Effective mobilisation of savings and their seamless channelisation into investments holds the key in sustaining and accelerating growth,? he said. The Centre, which ran up the fiscal deficit to a 16 year high of 6.9% in its efforts to boost the flagging economy, is currently on a fiscal consolidation drive and expects the private investment to replace the rolled back public expenditure.