9.47 PM Sunday, 25 February 2024
  • City Fajr Shuruq Duhr Asr Magrib Isha
  • Dubai 05:28 06:42 12:35 15:52 18:22 19:36
25 February 2024

India may grow 9-10%: PM

Indian Prime Minister Manmohan Singh (C) Governor General of New Zealand Anand Satyanand (L) and Indian Minister of Overseas Indian Affairs Vayalar Ravi (R) during the opening ceremony of the Ninth Pravasi Bharatiya Divas 2011 (AFP)

By Reuters

India's economy is likely to grow between 9 and 10 per cent from the next fiscal year that starts from April 1, after growing 8.5 per cent in the current fiscal year, Prime Minister Manmohan Singh said on Saturday.

India's domestically-powered economy grew 8.9 per cent in the September quarter -- matching the revised figure for the previous quarter -- defying weakness elsewhere. Singh's forecast was above the previous official forecast of 9 per cent.

"Despite the uncertain global economic scenario, I am happy that our economic recovery is progressing very well," Singh told the annual meeting of non-resident Indians in New Delhi.

"We expect that from the next year onwards, we will be able to grow at a rate between 9 and 10 per cent."

India, Asia's third largest economy, grew at an average of 9.5 per cent for three years to the year ending March 2008, before being hit by a global downturn that slowed the pace of annual economic expansion to 6.7 per cent in 2008/09.

Even as the economic recovery seems to be on track, Singh's government is under pressure to rein in inflation, particularly soaring food prices.

India's annual food inflation accelerated to 18.3 per cent in the week to Dec. 25, its highest level in more than a year, from 14.4 per cent in the previous week.

Although unseasonal rains are officially blamed for pushing up prices of vegetables such as onions and tomatoes, some commentators point instead to poor agricultural productivity and transport after years of few reforms and weak government investment.

Food articles have a weight of 14.34 per cent in the wholesale price index , India's most widely watched gauge of inflation, but a relentless rise in food prices is seen stoking broader inflationary expectations and eroding purchasing power of consumers.

Singh remained silent on inflation, but Finance Minister Pranab Mukherjee -- speaking at the same event -- acknowledged the need to control it.

"We have to take all measures to keep inflation at a moderate level," Mukherjee said.
The Congress-led government's failure to control inflation and a series of graft scandals including an alleged $39 billion telecoms scam, corruption accusations over last year's Commonwealth Games and the resurrection of a 25-year-old defence contract kickback scandal are seen eroding its public support.

A poll conducted by AC Neilsen early this month showed the ruling Congress party would lose over 40 seats if an election were called tomorrow. 

Prime Minister Singh said he is trying to make his government more transparent.

"We are examining seriously how to make systemic changes and ensure more transparent procedures and safeguards in our governance process," he said.