New Delhi, Feb 28 (UNI) The economy had decisively moved to a higher growth trajectory during the last five years with an average GDP growth rate of 8.7 per cent per annum, Finance Minister P Chidambaram said today.
Talking to mediapersons soon after presenting the Economic Survey for 2007-08 in Parliament, Mr Chidambaram said the growth was reflected in a near doubling of the pace at which the average income of the people was growing.
''If the rate of growth of per capita GDP of manufacturing products continues at the five year average of 7.2 per cent per year, average income would now double in a decade instead of a generation or more, earlier,'' the Finance Minister said.
He said the acceleration in improvement of the condition of the common man was also reflected in a near doubling of the rate of growth of per capita private consumption to 5.1 per cent per annum from 2.6 per cent in the previous 11 years.
The Finance Minister said the higher economic growth trajectory and the projected growth of 8.7 per cent in 2007-08 was based on a quantum jump in savings and investment rates.
The rate of investment (GCF) was 35.9 per cent of GDP in 2006-07 and is projected to increase in 2007-08. This was an unprecedented level of investment and showed the firm foundations on which the growth acceleration has been built. The saving rate has similarly scaled new highs reaching 34.8 per cent of GDP in 2006-07.
Mr Chidambaram said given the solid foundation of domestic investment and saving, the government was confident of meeting the 11th plan (2007-08 to 2011-12) target of 9 per cent average growth.
He said ''we will be able to mobilise the resources for meeting the growth target of 9 per cent, as set for the 11th five year plan.
Macro-economic fundamentals continue to inspire confidence and the investment climate is full of optimism.'' He said the inflation, which had risen during the second half of 2006-07, has been brought under control. The year on year rate of inflation declined to less than 4 per cent in August 2007 and had remained below 4 per cent for 23 consecutive weeks since then. The price inflation in primary articles had similarly been brought down to 3.8 per cent in January 2008.
The Finance Minister however admitted that there were several challenges to inclusive growth, namely agriculture, infrastructure, education and skill development. The last few years had seen a resurgence of the manufacturing sector. The agriculture sector, dependent as it was on the monsoon, continued to fluctuate, though the five year period ending 2007-08 had the second lowest year to year variation since the five years ending 1956-57. ''We need to accelerate the pace of growth in agriculture on a sustained basis,'' he added.
Mr Chidambaram said, ''I am optimistic about growth and containment of inflation in the coming year. It will be my priority to continue to provide a conducive investment climate and manage the macro economy to facilitate non-inflationary growth. We have to ensure that the benefits of this growth percolate to the most marginal and vulnerable segments of the society,'' he added.
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