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Indian economy to expand by 8.5-9% in medium to long term: FM

18 Oct 2011 Evaluate

Union Finance Minister, Pranab Mukherjee has said that India remains firmly on a growth trajectory of 8.5 percent to 9 percent in the medium to long-run, at a function to celebrate 25 years of India-Asian Development Bank (ADB) partnership. He further opined that the nation needs investment in quality infrastructure to enhance productivity and sustain the growth momentum.

The finance minister’s avowal comes at a time when Asia’s third largest economy is showing signs of slowing down while inflation on the other hand continues to remain at elevated levels of around 10 percent. Mukherjee also was concerned about the emerging challenges and cautioned that “we, however, need to be alert and respond to the emerging challenges and concerns, in a timely manner as we make efforts to achieve our potential as a young and fast growing nation.”

The minister said that food security and volatility in commodity prices has been a matter of concern for India and remarked that increased agricultural production on a sustainable basis is the only long term solution to the problems of availability as well as high and fluctuating food and commodity prices. Mukherjee said that ADB needs to focus on issues that help in linking farms to markets and promote research activities and efforts in improving productivity of dry-land farming, efficient use of water, rain-fed irrigation, development of drought-resistant varieties of seeds and other similar concerns.

The minister also called upon Asian Development Bank (ADB) to cover new ground through study and research on how Asian countries can help harness skills and innovations for sustaining growth. ADB should analyze developments not only in ADB member nations but in West Asia and the Gulf nations as well and incorporate them into comparative studies with the rest of Asia, to enable a holistic understanding of trends and development patterns in the Asian region, the minister added.

The Twelfth Five Year Plan (2012-2017) has an ambitious target of infrastructure investment estimated at US $1 Trillion or nearly 10 per cent of India’s GDP. Citing that ADB’s investment support in India’s infrastructure sector has been noteworthy, the finance minister said that the momentum of collaboration between ADB and India needs to be further stepped-up in this important area, considering the huge investment it needs of the sector.

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