Kolkata: India’s economy will continue to improve in the 2009-10 fiscal year (April-March) as stimulus packages have helped spur demand, but a full economic revovery will still take time, the finance minister said on Wednesday.
Growth for the fiscal year would exceed 6% despite a poor monsoon, Pranab Mukherjee said.
India, Asia’s third-largest economy, grew 6.7% in 2008-09, slowing from rates of 9% or higher in the previous three years as the global downturn hit harder than expected.
“If the present trend continues, second quarter GDP would be better than the first quarter,” Mukherjee said.
The economy grew 6.1% in the April-June quarter from a year earlier, picking up from an annual rate of 5.8% in the previous quarter.
Deficient monsoon rains, which were running 20% below average in mid-September, were a risk to growth, but Mukherjee said late rains have eased the drought situation and would help winter crops.
“With the late monsoon, there is less reason for apprehension because the water situation in the centrally monitored reservoirs has improved,” he said.
The government has raised farm subsidies to mitigate the impact of drought and is looking to early sowing of winter crops to offset the loss of summer crops.
Mukherjee said the shortfall in the sowing area of the summer crop was between 60 to 65 million hectares, which could translate into an output shortfall of 14-15 million tonnes.