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FM lowers 2011-12 economic growth projection to 7.5%

02 Dec 2011 Evaluate

Finance Minister Pranab Mukherjee has lowered the economic growth projection to around 7.5% for the current financial year from his budgetary estimate of 9% on the back of sharp decline seen in the economic growth in the second quarter of 2011-12. Mukherjee said, 'I am modest, I am not saying that I will be reaching the figure which I projected earlier during the budget -- 9% plus minus 0.25%. I am reducing it at around 7.5%.'

In the first quarter of the current financial year, the gross domestic product (GDP) growth declined to 7.7% and it further declined to 6.9% in the second quarter. As a result, in the first six months of the current financial year, India’s economic growth slumped to 7.3% from 8.85% in the same period of last financial year.

Mukherjee said the government was not in a position to boost growth through stimulus as it did during the global financial crisis in 2008-09. However, by adding further he said that certain policy changes can improve the situation little bit which we are doing.  He also expressed his hope that the government would be able to make national consensus on key economic reforms, which are crucially important to boost the economic growth.

The stimulus packages had helped the Indian economy recover from the global financial crisis in 2008-09. 'At that time, through three stimulus packages we could generate domestic demand and provide some support to industrial sector through which the process of deceleration was checked dramatically and we ended the year with a growth of 6.8% in 2008-09,' Mukherjee said.

He also said the projection of around 9% growth for the current financial year was based on the kind of recovery and resilience the Indian economy showed in 2008-09 and in the subsequent years.

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