Finance Minister Pranab Mukherjee on Monday said that timely and pro-active monetary and fiscal measures have enabled the Indian economy to stage a quick recovery amid the scars of a global economic meltdown.
“The finance minister stated that the adverse impact of the global financial crisis and the subsequent recessionary trend in the major economies of the world had cast a cloud of uncertainty over the domestic economy in the second half of 2008-09,” a finance ministry statement said.
“The policy measures undertaken by the government have worked and the macro-economic situation confirms signs of a turn-around for the economy,” it said.
Mukherjee was chairing a pre-budget meeting of the ministry’s Parliamentary consultative committee.
The Indian economy grew 7.9 per cent in the July-September period — its strongest in six quarters — on the back of higher consumer spending and private investment.
Recent data has triggered hopes that the worst might be over for the Indian economy. Industrial output grew by 11.7 per cent in November, the highest in two years, raising prospects of a sustained revival in the broader economy in the coming months.
Automobile sales grew by 68 per cent in December, while exports have turned positive in November after contracting for 13 successive months.
However, there are concerns over rising inflation and a widening deficit in the government’s budget.
India’s wholesale inflation rose by 7.3 per cent in December as policy makers launched a plan to contain prices by shoring up supplies of staple items such as sugar and foodgrains.
“While food price inflation appears to be abating, much of the fall is confined to fruits and vegetables, which in our view is a seasonal decline and is unlikely to last beyond February,” said Sonal Varma of Nomura Financial Advisory and Securities.