New Delhi, Dec 9 (ANI): Union Finance Minister Pranab Mukherjee has said that the government has taken several fiscal and administrative measures to contain the price rise and continues to be vigilant on the price front.
"Silver lining is that inflation in food item has declined to single digit i.e., 9.97% in October, 2010. With normal rainfall, the kharif production is now expected to rise by over 10 percent year on year for food grains and even higher for cash crops such as cotton and sugarcane," said Mukherjee, while addressing the sixth meeting of the Parliamentary Consultative Committee attached to the Ministry of Finance here on Wednesday.
The subject matter of the meeting was 'State of Economy'.
Mukherjee said that the Indian economy has done well in recovering its growth momentum from the impact of the global financial crisis over the last 18 months.
"Our economy registered an annual average growth in Gross Domestic Product (GDP) of 9.5 per cent in the three year period from 2005-06 to 2007-08. The global economic slowdown lowered our growth rate to 6.7 per cent in 2008-09," he said.
Mukherjee further said that growth recovered in 2009-10 to 7.4 per cent has touched 8.9 per cent during the first half of 2010-11.
"The recovery has been broad based with agriculture, industry, manufacturing and services, all contributing to the consolidation of the growth," he said adding that the economy has become remarkably resilient to both external and domestic shocks.
"It not only recovered rapidly from the global economic downturn and other external shocks, but also took the monsoon failure last year in its stride and is now showing robust growth," he added.
Mukherjee said that there is a need to improve the public distribution system so that people below poverty line get the food grains at nominal price i.e., wheat at Rs.2 per Kg. and Rice at Rs.3 per Kg. (upto 35 Kg.)
"Different sectors should project their demand correctly so that there is optimal utilization of available resources," he added.
Mukherjee said that thought the economy is on a path of higher growth yet there are certain areas of concern. He specifically mentioned in this regard about trade imbalance, volatility of FIIs, current account deficit, reduction in FDI inflows to almost half in last six months and above all, crisis in Euro zone affecting the trade balance.
He further said that there is an urgent need to make more investment in research and development and innovation both by industry and the government and for development of skilled manpower to sustain the high trajectory of growth in future as well.
Various members of the Consultative Committee, who participated in the discussion, stated that there should be increase in agriculture share of GDP growth, which is at present only around 15% of the GDP.
To achieve that end, they suggested diversification of agriculture, use of micro-irrigation facilities, allocation of more credit to agriculture sector, adoption of new technologies for irrigation and higher production and need for bringing out second green revolution in the country. (ANI)