Over 8% growth possible next fiscal: FM

Over 8% growth possible next fiscal: FM

New Delhi: Finance minister Pranab Mukherjee on Thursday projected a 15-20% fall in summer crop output, and said economy in the next fiscal could grow over 8% if no further adverse situation emerges.

He also said despite a deficient monsoon, Indian economy will register “some reasonable growth of over 6%" in the current financial year.

“From the picture of sowing, one can easily estimate that there is a likelihood of a shortfall (of kharif crop output) to the extent of 15-20%," Mukherjee said at a FICCI conference here. He, however, also said that the exact quantum of the shortfall will be known only when harvesting starts.

Admitting that there is a situation of drought in the country, he said so far 252 districts in 10 states have been declared drought-affected.

Replying to a query whether economy could grow over 8% next fiscal, he said, “There is a possibility (of over 8% growth) if there is no further adverse situation over which we have no control."

On the fiscal front, Mukherjee said it was government’s endeavour to ensure that paucity of resources does not hamper private investment and that the government has spread out its borrowing to prevent any crowding out of the corporate sector.

He said it was necessary to make a “temporary deviation" from the fiscal discipline to provide the required stimulus to the economy hit by upsurge in fuel prices and global meltdown.

“I emphasise on the word temporary because...these levels of deficit both fiscal and revenue cannot be sustainable. We shall have to come back," the finance minister said adding his target to bring down fiscal deficit to 4% by 2011.

Mukherjee did not sound quite confident of implementing the Goods and Services Tax (GST) in the country by 1 April 2010. “We shall try to stick to that date if possible, but still there are certain areas of divergences," he said.

Further, Mukherjee said the areas of concern that the country faces at present are drought, inflationary pressure, government’s borrowing and its consequences on the long-term funding of the corporate sectors.

“All these are relevant issues on which we shall have to deliberate and make an assessment of the situation," he said expressing confidence of overcoming the challenging task before the country.