Finance minister Pranab Mukherjee on Tuesday said double-digit growth is not a pipe dream for India but the government has to manage fiscal deficit and inflation.
?We shall have to move towards the betterment, towards the development and 9-10% growth is achievable. It is not a pipe dream,? he said while winding up the discussion on the general budget in the Rajya Sabha.
?Benefit of growth is necessary, price control is necessary, fiscal consolidation is necessary,? he summed up. Mukherjee said the country cannot rely on unlimited borrowings. ?Our fiscal credibility will otherwise be seriously challenged, if we indulge in financial profligacy. We had to borrow over Rs 4,00,000 crore in the current fiscal. Living on unlimited borrowing is not possible,? he said. The government has improved upon the recommendations of the 13th Finance Commission to pare its fiscal deficit to 5.5% in 2009-10 from 6.8% in the current fiscal.
According to the commission?s recommendation, the fiscal deficit should come down to 5.7% in 2010-11, 4.8% in 2011-12, 4.2% in 2012-13 and 3% the following year. Fiscal deficit is government?s excess expenditure over receipts. Mukherjee further said the decision to raise duties on crude and petroleum products would also benefit the states as additional revenue of Rs 26,000 crore would be shared with them.
The increase in petrol and diesel prices through administered price mechanism would have deprived the states of their share of taxes, he added. Replying to discussions on general Budget in the Lok Sabha last week, Mukherjee rejected the demand for a rollback of the increase in prices of petrol and diesel, saying the ?financial condition does not permit?.
On high inflation, the minister said it was mainly due to a low base. Last year during these months, inflation was in negative zone and the impact of low base may remain for few more months till May-June this year. The finance ministry expects inflation to decline from July onwards. Inflation has touched 9.89% in February and likely to cross double-digits in this months.
?I will not be surprised if it (inflation) reaches double digit in March,? he said. Inflation numbers for March would be announced in mid-April. The Centre, he said, has taken all steps to insulate the vulnerable sections by releasing food grains for sale in the open market and is working closely with the states to address the issue.
A meeting of the committee of the chief ministers, constituted by Prime Minister Manmohan Singh to deal with rising prices, would be held shortly to take stock of the situation.