Finance minister Pranab Mukherjee on Monday said the ?normal monsoons? this year would help the agriculture sector to expand at a spectacular 6% this financial year, up from a meagre 0.2% last fiscal.
?We are looking at a significant rebound in agriculture and allied sector growth at about 6%,? Mukherjee told leading economists here at a pre-Budget discussion.
Agriculture growth had shown signs of a recovery with the sector growing at 3.45% in the first half of the fiscal, compared to 1.4% the same time a year ago. Partha Sen of the Delhi School of Economics said after the interaction with the minister that this is not an easy year for budget making considering the need to tackle inflation. ?Monetary policy is a very blunt tool to fight food inflation,? said Sen. He also said there is scope for the government to restrict foreign capital inflows and raising taxes in some areas. FM also said exports have grown reasonably well in the April-November 2010 period at 26.7%. He said the recovery in India’s growth has been broad based with agriculture, industry and services all contributing to the consolidation of the growth momentum. He said the 8.9% growth in the first half of 2010-11 took the country back on the high growth path in the pre-economic crisis years.
Though industrial growth in November 2010 has slipped to 2.7%, cumulative growth during April-November 2010-11 is still high at 9.5% compared to 7.4% during the corresponding months of 2009-10, he said. With this recovery underway, a calibrated exit of stimulus is being implemented and the reduction in fiscal deficit for the year 2010-11 is in line with the commitment made in the medium-term fiscal policy statement, Mukherjee said.