Economy recovering but modestly: Pranab

Economy recovering but modestly: Pranab

New Delhi: Finance minister Pranab Mukherjee on Friday exuded confidence that economy will pick up during the second half of current fiscal but overall growth will be moderate and said the stimulus for revival of industry would not be an annual affair.

“I am confident that in the third quarter and the fourth quarter it will be possible for us to have good growth but this growth will not be as good (as during the last year)," Mukherjee told journalists at the Women’s Press Corps.

Hoping that industry would follow the growth trend of July, a month that saw factory output rising by 6.8%, the minister said that it was imperative for him to give the stimulus packages to help economy fight the effects of global financial turmoil and this resulted in higher fiscal deficit.

“If the stimulus was given, it was a one-time measure. One cannot expect this would be repeated every year... had I not reacted, my fiscal deficit would not have gone high," he said but cautioned that high level of budgetary gaps were not sustainable.

Asked about the opposition to disinvestment by some constituents of UPA, Mukherjee said, “I will manage the coalition as we have done it in the last five years... After all what is politics, it is to manage contradictions."

On drought, he said, the adverse impact, particularly on the paddy crop, was over and added “with this rain, I hope improvement. We have suggested to the state agriculture ministers to have short duration crops". The Centre, he said, would provide seeds for such crops.