India will give top priority to mitigating the impact of the poor monsoon in large parts of the country this year, Finance Minister Pranab Mukherjee said on Tuesday, while assuring the economy will manage to grow by over 6 per cent this fiscal.
"At this juncture, delayed monsoons have impacted many parts of the country's agrarian economy," Mukherjee told a meeting with top industrialists in New Delhi, organised by atelevision channel.
"Mitigating the impact of deficient monsoon is a high priority."
The finance minister has already said that thanks to the record output of food grain last agriculture year (July 2008-June 2009), estimated at 233.87 million tonnes, the country was approaching this year's drought with adequate buffer stocks.
Accordingly, as opposed to the normal buffer stock norm of 4 million tonnes of wheat and 5.2 million tonnes of rice, the country had additional reserves of some 3 million tonnes of wheat and 2 million tonnes of rice.
Referring to the overall economy, Mukherjee said India's gross domestic product (GDP) grew by 6.7 per cent last fiscal despite the global crisis and will manage to expand by over 6 per cent this fiscal despite a difficult situation.
"Industrial sector has shown signs of revival. The demand for capital goods has picked up. Consumer durables recorded better growth in the first quarter," the Finance Minister said, explaining the reasons behind his optimism.
The finance minister also sought to assure the assembled industrialists that the government's large borrowings programme will not crowd out investments for the private sector, nor will it nudge interest rates higher.
"In this regard, the government and the Reserve Bank of India are in constant touch so that the borrowing programme can proceed in a non-disruptive manner," he said.
Mukherjee said the government was forced to stray from the path of fiscal prudence so that it could provide that much-needed fiscal stimulus to the economy and insulate it from the impact of the global financial crisis.
"But the roadmap for fiscal reforms for the central and state governments will be laid down. It will be in the report of the 13th Finance Commission. This report is expected shortly."