Finance Ministry in its year-end review has stated that India retained its position as one of the fastest growing major economies in the world, as the Indian economy grew 7.2 per cent in the first half of the current fiscal. The ministry said that the stress given to fiscal consolidation through expenditure rationalisation and revenue-raising efforts and the focus on administrative measures for cooperative financial governance and steps towards containing inflation have contributed significantly to macro-economic stability.
The report pointed out that the economic growth has continued to be robust even though the global economy remained sluggish and recent rise in petroleum prices. It said that the government has undertaken a number of policy measures including enhanced public investment, kick starting stalled projects, improving governance through systemic changes like open auction for natural resources, and improving business environment. Further, the government has also liberalised and simplified the foreign direct investment (FDI) policy in the sectors like defence, railway infrastructure, construction and pharmaceuticals etc.
Talking about inflation, the report said that it has remained in comfort zone during the year with retail & wholesale inflation averaging 5.2% and 2.7%, respectively, in the April-October period, while fiscal deficit & current account deficit as percentage of GDP improved and the growth rates for agriculture and allied sectors, industry and services sectors during the six-month period are estimated at 2.5 per cent, 5.6 per cent, and 9.2 percent, respectively. During April-October period of the ongoing fiscal, trade deficit decreased to $ 53.2 billion from $ 78.2 billion a year ago.
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