New Delhi, Nov 1 (ANI): Union Finance Minister Pranab Mukherjee on Monday said the Indian economy is on the path of recovery and would soon go back to the robust growth rate of around nine percent average.
"Today, when we meet, the economy is on the path of recovery and the growth in the first quarter is estimated at 8.8 percent. This has been due to the combined efforts of the Centre as well as the State Governments, which have collectively provided necessary stimulus to the economy," said Pranab Mukherjee, while addressing the Finance Secretaries/Finance Commissioners of States and Union Territories after inaugurating the second Annual Conference here today.
"The recovery is in line with grown projection of 8.5 ± 0.25% in 2010-11. Keeping in view the recovery, which spans all three sectors, namely, agriculture, industry and services, it is reasonable to expect that the economy will go back to the robust growth path of around nine percent average," he added.
Pranab Mukherjee, however, said inflation is a major area of concern, adding that the Government has taken a number of anti-inflationary measures to bring down the rate of inflation, which has moderated to 8.6 percent in September 2010 from the headline inflation of 11 percent at the beginning of the current financial year.
"However, inflation is a major area of concern. The current financial year started with a headline inflation of 11 percent. The main drivers of this relatively high level of inflation were food prices. A number of anti-inflationary measures have been taken by the Central Government to bring down the rate of inflation. I am happy to note that inflation has somewhat moderated to reach 8.6 percent in September 2010," said Mukherjee.
"The Central Government has requested the States to strengthen their public distribution systems to ensure that the vulnerable groups of the society are not adversely affected by the current level of inflation. I would like the State Finance Secretaries take appropriate steps in this regard. With these efforts, inflation should further go down to more acceptable levels," he added.
Mukherjee further said that for the years 2011-12 and 2012-13, we have projected fiscal deficits of the Centre to further reduce to 4.8 percent and 4.1 percent of Gross Domestic Product (GDP) respectively.
"The debt stock of the Centre is also projected to come down to 48.2 percent of GDP by the end of 2012-13 as per the Medium Term Fiscal Policy Statement, 2010-11. This is in line with the recommendations of the 13th Finance Commission," he added.
Pranab Mukherjee said that the 13th Finance Commission has recommended grants-in-aid to States amounting to Rs. 3,18,581 crore over its award period, adding that the Government of India has issued guidelines for most of these grants starting from current year and he would expect the States to be able to avail the grants in a timely manner and benefit from them.
"The 13th Finance Commission has mandated that fiscal deficits of the states should come down gradually to 2.4 percent of GDP i.e. three percent of GSDP by the end of the award period. The Commission has also projected that the debt stock of the States will consequently reduce to 24.3 percent of GDP," said Mukherjee.
Mukherjee said that he had said in his budget speech for 2010-11 that banking services will be provided to habitations having population in excess of 2000 by March 2012 through Business Correspondent and other models with appropriate technology backup.
"In my budget speech for 2010-11, I had said that banking services will be provided to habitations having population in excess of 2000 by March 2012 through Business Correspondent and other models with appropriate technology backup. The State Level Bankers' Committee (SLBCs) have identified 73,000 such villages and have prepared the Financial Inclusion Plans (FIPs)," said Mukherjee.
"I would urge the States to support the FIPs, sensitise the District Collectors/District Magistrates and review the progress through the SLBC mechanism. States are also requested to route all social security benefits through the banking system so that financial inclusion becomes viable and meaningful," he added.
The Finance Minister said that one of the crucial aspects of financial inclusion is providing banking services in unbanked blocks.
"At present, there are 88 unbanked blocks of which 80 are in North Eastern states, four in Jammu and Kashmir and four in Jharkhand," he added requesting the State Governments to provide assistance in terms of necessary infrastructure, connectivity and security services. (ANI)