Indian economy to grow 9-10 percent in coming years: Mukherjee (Roundup)

December 23rd, 2009 - 7:04 pm ICT by IANS  

Pranab Mukherjee New Delhi, Dec 23 (IANS) The Indian economy is well on its way to achieving once again a 9 percent growth in the coming years, while expanding at over 7.5 percent this fiscal, Finance Minister Pranab Mukherjee said here Wednesday.
“The target of growth of 9-10 percent has been there for a very long period. It is now within our reach and we shall achieve it,” Mukherjee told the 104th annual session of the PHD Chamber of Commerce and Industry here.

Referring to the mid-year fiscal review, where the government had suggested growth of 7.75 percent in 2009-10, the finance minister said: “It would be better to say that it would be between 7.5-8 percent.”

He also maintained the country was “one of the fastest growing economies in the world”, and added: “In the next two to three years, we are targeting economic growth of 9 percent and the growth rate will be more inclusive and widespread.”

Stock markets toasted his statement, with the benchmark sensitive index (Sensex) of the Bombay Stock Exchange soaring 539 points or 3.23 percent to end at 17,231.11 points.

Mukherjee also emphasised on the need for this high growth to be inclusive and spread to wider section of society, especially in the hinterland. He, nevertheless, said there were some necessities in the system to achieve that desired goal.

“Our agricultural growth should be at least 4 percent for a balanced growth.”

At the same time, the finance minister said, the farm sector will end up expanding at a slower pace this fiscal due to the adverse effects of inadequate monsoon and drought earlier in the year.

“There has been a downtrend in agriculture growth because of unexpected floods and drought. It was 2.5 percent in the first quarter of this fiscal and 1 percent in the second quarter,” he said.

“I do not know what it is for the third quarter.”

During an interaction with reporters, Mukherjee also indicated that the fiscal stimulus packages to counter the adverse impact of the global slowdown may continue till February.

“You will have to wait till the budget,” he replied when asked for a specific comment on the issue, adding some more encouraging signs were emerging for the economy at large after the unexpected high growth in the second quarter.

“Exports in November have been encouraging, but at the same time, we cannot expect a robust turnaround unless there is a robust growth in the US, Europe and Japan. They account for 60 percent of our export market.”

Speaking on the two major tax reforms that the government is planning to introduce — Goods and Services Tax (GST) and the Direct Taxes Code — Mukherjee said he was pleased with the steps being taken in launching these initiatives.

“There has been considerable progress in preparing a roadmap for introducing the GST,” he said of the new tax system, that will replace the existing excise structure of the federal government and align the state levies into a single regime by April 1.

The minister also said the direct tax code, which has been widely circulated among all the stakeholders, will be recast before implementation depending on the objections, suggestions and comments.

“I would like to point out that I have an open mind. It is not that something has appeared in the code and that is why we have to stick to it.”

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