India will achieve 8% growth despite Q1 slowdown: FM

Despite declining economic growth and persisting uncertainties in global environment, Finance Minister Pranab Mukherjee is hopeful that India will be able to achieve 8% growth in 2011-12. He said ‘we will have 8% growth even this year though the first quarter growth figure is 7.7%.’

Mukherjee said that a good monsoon could ensure agricultural growth of about ‘4 % plus’ and growth in the manufacturing and services sector clearly indicates that it will be possible for us to have the growth at around 8% for this year.’ On the growth projection for the next five year plan period, he said India has projected 9% growth for the 12th five-year Plan (2012-17) and the country is taking every necessary step to ensure that the momentum continues.

Stating international environment as area of concern he expressed his concern over the high ratio of sovereign debt to the GDPs of Eurozone nations and slow pace of recovery in industrialized economies. By adding further he said, inflationary pressure and forex volatility in emerging markets is ‘posing serious concerns, but at the same time, as the collective leadership of the international community has been able to address the problems (that) arose out of 2008 crisis, we will be able to overcome this current crisis,’ ensuring that India’s growth will be 8% plus.

On the recent devaluation of rupee, he said the Reserve Bank of India is watching the situation. ‘The RBI Governor has made it quite clear that as and when the situation warrants, the RBI will intervene. Right now, there is no such situation.’ Pranab Mukherjee will be visiting Washington for the IMF and World Bank’s annual meeting and he will also be meeting leaders from the BRICS (Brazil, Russia India, China and South Africa) nations, where the nations would review the global condition and try to work out a common approach to issues that be debated in the IMF-World Bank meeting.

‘We will also discuss our strategy in respect of the Euro zone crisis,” by adding further he said the BRIC leaders would exchange views and these will be reflected in a communiqué that is currently being drafted.

Afterward, at USIBC-FICCI Round Table Meeting Finance Minister said no country has remained immune to the fallout of the global financial crisis in 2008. Though the economic downturn was moderated and growth resumed in the second half of 2009 in most economies, the pace of recovery remained uneven.  Advanced economies grew more slowly than before, while fast emerging economies like India and China showed the way for the rest of the world.

“There is wide-spread apprehension that even the tepid global economic recovery that we have seen so far is stalling. Slowing global aggregate demand, the unresolved euro debt crisis, high commodity and oil prices, inflationary pressures and stressed currencies have shaved 1-1.5 % off the global GDP in the past 6-8 months,” he added.