Economy to grow 7.75%; inflation a worry: FM

Economy to grow 7.75%; inflation a worry: FM

New Delhi: The government today pegged economic growth for the current fiscal at 7.75%, higher than all previous estimates, but said high food inflation remained a cause for concern.

In a pre-Budget interaction with states finance ministers, Union finance minister Pranab Mukherjee pointed out that there was enough wheat and rice stocks and proposed open market sale for offloading of these stocks to increase availability in the market, which would in turn ease prices.

“A major area of concern is high food inflation; WPI index increased by 19.79%, therefore collaborative efforts of the central and state governments are required to tackle this problem... Offtake of surplus stock by the state governments are not satisfactory. Therefore, all the state governments may cooperate in this regard to lift these surplus stock alloted to them," Mukherjee said at the meeting.

He also called for efforts to increase farm productivity.

Mukherjee said that economic recovery will be a collaborative effort of the centre and the states.

Economic growth stood at 7% during the first half of the current fiscal, Mukherjee said, pegging GDP growth for the whole fiscal at around 7.75% -- a number that exceeds the initial estimates of the government as well as the RBI.

The Union finance minister asked the state governments to utilise the cash surplus for development activities.