Fiscal consolidation must for sustainable growth: Pranab | mumbai | Hindustan Times
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Fiscal consolidation must for sustainable growth: Pranab

mumbai Updated: Mar 06, 2010 19:36 IST

Finance Minister Pranab Mukherjee on Saturday said the current economic growth would not be sustainable without fiscal consolidation.

"Without fiscal consolidation the growth which we have achieved will not be sustainable," he told reporters on the sidelines of a function organised in Mumbai by the Reserve Bank of India.

He hoped that Indian economy would grow at 9 per cent during the next fiscal.

After growing at 7.9 per cent in the second quarter of 2009-10 and 6.1 per cent in the first quarter, India's gross domestic product (GDP) in the third quarter dropped to 6 per cent.

According to the government's advance estimates, the GDP will climb to 7.2 per cent during the entire fiscal, from 6.7 per cent in 2008-09.

Earlier this week, the finance minister had said that the dip in the third quarter was because of the steep fall in agricultural output and hoped that the economic growth would pick up in the last quarter of this fiscal.

"The contribution of other elements in WPI (Wholesale Price Index) basket other than food items is not very high. There is inflationary pressure due to short supply of food items. The inflation is due to these supply constraints," he said.

"There is short supply of edible oil, pulses and sugar. But in case of cereals, the prices have increased because of higher procurement prices," he added.