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Worst is behind for economy, says Cabinet Secretary

business Updated: Mar 27, 2009 22:48 IST
HT Correspondent

India is set to exceed 5.1 per cent GDP growth rate projected by the International Monetary Fund for 2009-10 with certain sectors with strong domestic demand showing signs of recovery.

“We are beginning to see the light of the day though there are some worries,” Cabinet Secretary KM Chandrasekhar said at the CII annual convention. He said the contraction of growth in advanced countries would impact the developing countries.

He added that the next week’s G20 meet in London would be key in the context of global slowdown. He said the fiscal and monetary measures put together have injected an additional Rs 4,30,000 crore into the system. Sectors like steel, cement and capital goods are showing signs of a turnaround.

He also underlined the need to further soften interest rates and said that especially the private sector banks have not cut interest rates as much as they were expected to despite easing monetary policy. “There is certain stickiness in banks and they have not shown response as we would have liked particularly private sector banks,” Chandrasekhar said.

GK Pillai, commerce secretary, pointed out that India’s exports in the April to February period stood at $156 billion and is set to touch $170 billion by the end of the fiscal, which is a growth of 3-4 per cent against 27 per cent recorded in 2007-08.

Pillai said the effort should be to keep exports at the same level in 2009-10. Imports at $270 billion, grew by 19 per cent in the current fiscal. “We are against protectionism and it is clear that Indian economy is quite an open one with an import growth of 19 per cent.”

Revenue Secretary PV Bhide said that collection of direct and indirect taxes this fiscal is set to be marginally higher than last year.