7% growth inadequate, FM seeks Oppn cooperation to improve it | business | Hindustan Times
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7% growth inadequate, FM seeks Oppn cooperation to improve it

Acknowledging that 7% growth was inadequate, finance minister Pranab Mukherjee today sought opposition cooperation to improve investment climate.

business Updated: Dec 09, 2011 15:08 IST

Acknowledging that 7% growth was inadequate, finance minister Pranab Mukherjee on Friday sought opposition cooperation to improve investment climate.

The government, he said, was keen to step up growth while tackling inflation which is perilously close to double digit, even though food prices have shown declining trend over the last seven weeks.

Replying to a debate on inflation, Mukherjee said price rise was linked to international situation but made it clear that the government was not in a position to increase subsidy to address the price situation.

Contending that economic growth has been high during UPA rule, he admitted that GDP of 7% was "not adequate" but refused to accept the opposition contention that it was all time low.

"There is no link between inflation and growth. We shall have to contain inflation, we shall have to go for higher growth...please don't say that nothing has happened," he said.

Mukherjee said the government would endeavour to bring down inflation to 5-6% from 9.73% in October.

NDA and Left parties were not satisfied with his reply and staged a walkout, with Leader of the Opposition Sushma Swaraj saying that arguments offered by Mukherjee were stale, oft-repeated and did not offer any relief to common man.

The economy registered a growth of 7.3% in the first half of the current fiscal. The annual growth is projected to be 7.5%, down from 8.5% recorded in 2010-11.

Mukherjee said there was need for creating confidence to encourage investment. "That can be done by allowing institutions to function...we can create that confidence even though we have divergence of views on issues."

Referring to an article which said industrialists were saying 'tata to India, hello to world', he said if investor confidence is created, industrialists will say 'tata world, home sweet home'.

About inflation, the finance minister said India, which is the fourth largest economy in the world, cannot remain oblivious to global developments.

"When we discuss price rise, we shall have to keep in mind the state of the world economy...no country lives in isolation," he said, adding oil and commodity prices have gone up and were impacting the price situation at home.

Crisis in smaller countries like Greece, Portugal and Spain, he said, would have implications for the rest of the world, including India although the country's financial sector has no direct link with these countries.

Rejecting the Opposition allegation that nothing was done by the government to check price rise, the Minister said food inflation has come down from 22% in February, 2010 to 6.6% in November.

He also said food production, because of the efforts of the government, increased from 198 million tonnes in 2004-05 to 241.56 million tonnes now.

On Opposition's continued attacks, Mukherjee said they could say it was not enough and "humbly accept it. But please don't say nothing has happened."

Mukherjee also recalled how Prime Minister Manmohan Singh had dealt with difficulties in 1991 after he took over as the finance minister.