The Indian economy has been able to face up to the recent global economic slowdown and will grow faster backed by strong domestic demand and a young population, Finance Minister Pranab Mukherjee said in Chandigarh on Saturday.
Delivering the PN Haksar memorial lecture at the Centre for Research in Rural and Industrial Development, Mukherjee said though the Asian economies had been impacted up to a certain extent by the slowdown, they were showing clear signs of a faster recovery.
"I genuinely believe that as the global economy begins to pull out of the crisis, Asia looks set to emerge from the downturn sooner and stronger than any other region," Mukherjee said.
"The current century may well be termed by historians as the century of Asia's renaissance."
He added that financial experts were predicting that China and India, which account for 40 percent of the world population, would have a combined share of 35 percent of the global economy by 2025.
India's resurgent growth, despite the global slowdown, was owing to three drivers -- domestic demand, young population and a democratic set up, Mukherjee said.
The "money glut" in the US, which saw loose monetary policies that allowed Americans to live beyond their means, and the "savings glut" in East Asia and the Middle East led to the build-up of the house price bubble and caused the financial crisis, he said.
"India's growth story, in sharp contrast, has primarily relied on domestic demand. The savings rate in India has increased steadily from 23.7 percent in 2000-01 to 37.7 percent in 2007-08," added the finance minister.
"Indian growth is primarily driven by domestic demand and India is less vulnerable to external shocks than countries relying on external demand."
According to him, a young population and a democratic set-up, in which the political system has to live up to the fairly high expectations of the people, are also positive drivers for the Indian economy.
Mukherjee added that in 2009-10, the country's economic growth is expected to be between 6 and 7 percent.
"The effort now is to bring the economy back on the growth path of 9 percent per annum at the earliest."