'Government sees 8 pc plus growth next fiscal'

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Gyanendra Kumar Keshri | 16 Jan, 2012
In an interview with Minister of State for Finance Namo Narain Meena said, India's "growth story is intact" and the government would target more than eight percent growth in the next financial year on the back of easing inflation and rate cuts by the central bank that would stimulate private investment and demand.

Excerpts of the interview...

How you see India's gross domestic product (GDP) growth in the next fiscal?
Namo Narain Meena: Our growth target for the next financial year will be eight percent plus. In the medium-term, say, in two-three years, we target to reach double-digit growth. Indian's gross domestic product (GDP) growth is estimated to fall to seven percent in the financial year ending Mar 31, against the budgetary target of nine percent (plus-minus 0.25 percent). The economic growth was 8.5 percent in 2010-11.

And in current financial year?
Namo Narain Meena: See...in the current financial year, we could not meet the growth target because of global slowdown. Inflation remained higher than expected. It also affected the real GDP growth. Things are likely to improve in 2012-13.

Annual food inflation has continued to be in the negative for the week ending Dec 31. How you see this movement?
Namo Narain Meena: Inflationary pressure is easing and overall inflation will come down to 6 to 7 percent by March-end this year. Our priority is to bring inflation down and increase growth. Inflation is more or less under control. Food prices have in fact declined; so the focus will be on growth.

After remaining near double-digit for almost two years, food inflation has dropped sharply in the last two months. In fact, food inflation slipped into negative for the first time in six years. Food inflation dipped to minus 3.36 percent for the week ended Dec 24 as compared to 20.84 percent during the corresponding period of last year. The headline inflation based on the wholesale price index, however, remain at an elevated level. It was recorded at 9.11 percent in November.

There is a substantial improvement on the inflation front; so the RBI can now cut rates.

After registering a slower growth in the April-September period, industrial output slipped into negative zone and fell by 5.1 percent in October. According to the latest available data, India's industrial output (IIP) recovered in November. What is your view?
Namo Narain Meena: Despite the slowdown, India remains one of the fastest growing economies in the world. High savings rates and strong domestic demand will drive our growth in the future. India's economic fundamentals are strong and it will remain an attractive destination for overseas investors.

How you analyze the impact of graft and corruption controversies on business sentiments and overseas investments?
Namo Narain Meena: These things are temporary. The long-term India growth story is intact. We have strong demands. Foreign investments are increasing. Gulf countries have started looking East. India is the obvious choice.

Since the election code of conduct came into force, the poll schedule will affect Union Budget. Now on which date the union budget for 2012-13 will be presented?
Namo Narain Meena: Definitely, because of the assembly elections, budget will be delayed. The date has not been finalized yet.

The interview was taken in Jaipur. The minister was in Jaipur to attend the three-day Pravasi Bharatiya Divas, the annual congregation of the Indian diaspora.