New Delhi: Helped by stimulus measures, the Indian economy is expected to grow at a relatively high pace despite adverse global economic environment, the government said on Thursday.
In her customary address to the joint session of Parliament, President Pratibha Patil said, “Even in the prevailing adverse global environment, our economy, it is hoped, would still register a relatively high growth rate.”
Official estimates have pegged GDP growth for FY 09 at 7.1%, considered good at a time when most developed economies are facing recession.
She said the government has taken a series of measures to stimulate the economy. These steps would drive demand for goods and services reviving production activities in the manufacturing as well as services sectors.
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“India’s domestic demand can inject fresh momentum to our economy,” Patil said, adding that the country’s banks are well capitalised and face no threat that many banks face in other parts of the world.
She said the government policies have ensured that even as the country faces an economic slowdown along with the rest of the world, “our fundamentals are much better.”
The economy has seen unprecedented expansion of 8.9% growth in the last four years and above 9% in the last three years.
As the global downturn started hitting the Indian economy in the second half of the current financial year, the government intervened through two stimulus packages - first in December and then another in January.
The measures included reduction in taxes and duties, boost to infrastructure sector, injection of liquidity by the Reserve Bank of India and specific steps to the worst affected sector like exports, housing and automobile.
Besides, the Centre relaxed norms to facilitate more government expenditure.
“My government has relaxed the constraints imposed by the fiscal responsibility and budget management act to increase capital expenditure by the state governments,” she said.
The President said the farm sector grew by 4.5% in 2007-08.
However, according to the advanced estimates of GDP, the farm sector growth is likely to slowdown to 2.6% this fiscal.