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Growth may cross 9 p.c., inflation to fall to 6 p.c. by March: GoI

Mirza Jatt

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Growth may cross 9 p.c., inflation to fall to 6 p.c. by March: GoI

Overcoming the impact of global economic recession, Indian economy is poised to achieve nine per cent growth in the current financial year itself driven by robust performance of agriculture and industry sectors, the Government said.

In its mid-year analysis of Indian economy, the government said high inflation, which was a major concern, has started declining and hoped that it may fall to six per cent by March, 2011 from over eight per cent now.

“The very rapid 8.9 per cent growth in GDP recorded in the first half of 2010—11 raises the possibilities of a faster recovery to the pre—crisis level...It is estimated that growth in 2010—11 will be 8.75 per cent with variation of 0.35 per cent on either side,” the analysis said.

The government has, however, made a case for deepening strengthening of economic reforms to sustain high growth rate and raising it further to double digit level in the medium to long term.

Immediately after tabling the analysis in Parliament, Finance Minister Pranab Mukherjee told reporters, “I am hoping that inflation will come down to 6 per cent by March 2011.”

In the economic survey this year, Mukherjee had projected a growth rate of 8.5 per cent with variation of 0.25 per cent on either side.

“Now why we have shifted the goal post from 0.25 to 0.35 per cent, one of the reasons is there have been certain uncertainties particularly recovery of Euro. And Euro has relevance both from viewpoint of FDI, investment and also from external trade, particularly export.

“A sizable percentage of Indian exports are destined towards Europe. Therefore, the recovery rather rapid and robust recovery of Euro is important from India’s point of view,” Mukherjee said.

Contrary to estimates by various think tanks, the economy during second quarter expanded by 8.9 per cent taking the overall growth rate to the same level in the first half and raised hopes of 9 per cent growth in the current fiscal.

On deepening of reforms, the finance ministry has underlined the need for further fiscal consolidation and steps to deal with external capital flows “which are posing some adjustment challenges” in the economy.

The surge in capital flows, it said, has raised the question of domestic absorptive capacity which could lead to “over heating” of the economy.

However, with current account deficit of 2.9 per cent in 2009—10, the capital flows at 4.1 per cent of the GDP have not been a “matter of concern”, the analysis said.

The Analysis called for improvement in infrastructure and and core industries, universalisation of elementary education and issues concerning climate change as move to deepen and strengthen economic reforms to sustain high growth levels.

The Hindu : Business News : Growth may cross 9 p.c., inflation to fall to 6 p.c. by March: Govt.
 
May be they're right about growth but it's utter congressi bakwaas when it comes to inflation.

Congress has miserably failed to control inflation and food prices.

What's the point of having such a growth in which the poorest of the poor can't afford a decent meal?
 
i understand ur concern but this is how growth in a democracy take place.

now if u want fast and high growth then u have to take top - bottom approach.

in simple words, 1st the industrialist make good profit and growth and then their profits gets distributed to common man......Eg: DMIC......indias gonna invest heavily in next 2 decades in manufacturing to bring it to 25% of GDP in 2020 and 30% in 2030......

same as that of china !
 
^^ Thats all well and good. But I still don't see the urgency in the present government to provide support for manufacturing. Although I see the manufacturing figures are at the highest in last six months, I still think GOI should do more to drive up manufacturing base.

GOI should get on with the reform process. Multi-brand retail, Financial services even the Legal services should open up. Insurance is the other big thing. I think they are part of EU-India FTA deal.

Labor laws should be changed too. There wasn't a single change in our constitution (law) since 1954. We need to get rid of some archaic laws which no longer are needed as we moved from socialist to capitalist economy.

Issues with bureaucracy should be addressed. Pockets of the same could be privatized. Railways and Road Transportation could be privatized. Infrastructure is key which I think they are focusing on.

Finally lets bring all the money we lost through corruption back to India. Change the laws to incentivize to bring that money back to our market. No point in trying to punish people for having black money when the whole society was filled with corruption.
 
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We need consistent 10% growth for atleast a decade to bring forth the economy. Everything is ready we just need to tell the govt that instead of all out corruption they should do it little less with some room for development. They are just putting the most corrupted people in the highest bodies of the country.
 
^^ Nope..I don't think they did it on purpose. Ministers from Congress are pretty good, very well educated and represent us very well in the eyes of the world. Its the coalition parties that promote less than qualified people on to the scene. Case in point Raja, Sharad pawar, Mamata Benarjee etc. They can't do without them, that's the pitfall of our multi-party democracy. Everything moves at the same speed as our trains (30 kmph)
 
May be they're right about growth but it's utter congressi bakwaas when it comes to inflation.

Congress has miserably failed to control inflation and food prices.

What's the point of having such a growth in which the poorest of the poor can't afford a decent meal?

Is the inflation in Gujurat less than national inflation?
 
^^ Nope..I don't think they did it on purpose. Ministers from Congress are pretty good, very well educated and represent us very well in the eyes of the world. Its the coalition parties that promote less than qualified people on to the scene. Case in point Raja, Sharad pawar, Mamata Benarjee etc. They can't do without them, that's the pitfall of our multi-party democracy. Everything moves at the same speed as our trains (30 kmph)

What about CVC? Its the highest anti-corruption body in India but they put a person that has very bad reputation. They put a person as the head of CWG org committee that is known as the 'sports mafia' of India. Its just congress ministers are more clever than Raja, pawar etc that they are not caught.
 
^^ Thats all well and good. But I still don't see the urgency in the present government to provide support for manufacturing. Although I see the manufacturing figures are at the highest in last six months, I still think GOI should do more to drive up manufacturing base.

GOI should get on with the reform process. Multi-brand retail, Financial services even the Legal services should open up. Insurance is the other big thing. I think they are part of EU-India FTA deal.

Labor laws should be changed too. There wasn't a single change in our constitution (law) since 1954. We need to get rid of some archaic laws which no longer are needed as we moved from socialist to capitalist economy.

Issues with bureaucracy should be addressed. Pockets of the same could be privatized. Railways and Road Transportation could be privatized. Infrastructure is key which I think they are focusing on.

Finally lets bring all the money we lost through corruption back to India. Change the laws to incentivize to bring that money back to our market. No point in trying to punish people for having black money when the whole society was filled with corruption.

I see where you got your economic thinking and I'm liking it. I would add on the need for a strict regulatory body on financial services but other than that love all your suggestions. Bureaucracy being the Achilles heel of doing business in India- Small business must be able to open one up in no more than 1 week from submission.

India is projected to be the 3rd largest economy in the world behind China and US by 2050 and we should start preparing for it now. Treat Pakistan like Mexico where you have good stabilized relationships but let them be to their fortunes.
 
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What about CVC? Its the highest anti-corruption body in India but they put a person that has very bad reputation. They put a person as the head of CWG org committee that is known as the 'sports mafia' of India. Its just congress ministers are more clever than Raja, pawar etc that they are not caught.

I know. I am pretty sure its a plot to get their people out which otherwise would bring bad reputation to the party. But we all know if you lie, you keep on lying to cover up that lie. I think that's what congress is doing.

But my point is its just not Congress but every other political party is just as corrupt. But overall I like the composition of our ministry. Manmohan, PC, Pranab, Ramesh, Kapil Sibal are all very educated who represent aspirations of our country.
 

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