India has set an ambitious target of making 2012 the year of double-digit growth, even as it grapples with the twin problems of mounting deficit and rising inflation.
“India is back on a high growth trajectory,” Finance Minister Pranab Mukherjee said in a presentation in Washington on Monday to the Institute of International Finance.
Mukherjee is here with a high-powered team of policymakers — including Commerce Minister Anand Sharma and Planning Commission Deputy Chairman Montek Singh Ahluwalia — and leading industrialists at the India-US CEOs Forum on Tuesday.
He will also have a separate bilateral meeting with US Treasury Secretary Timothy Geithner on Tuesday.
Noting that India had not remained unaffected by the global financial crisis, Mukherjee said it has bounced back to 7.4 per cent growth in 2009-10 and is expected to register 8.5 per cent in 2010-11.
"My target is to make 2011-12 a year of double digit growth," he added.
With the world back on the road to recovery, the question was at what point of time should there be a total exit (from economic stimuluses), he said.
His prescription to the G-20 finance ministers ahead of this week’s Toronto summit was that all fiscal consolidation and stimulus exit should be staggered among various countries, so that the impact is softened.
The lingering debt crisis in the Eurozone could disrupt trade and lead to flight of capital from developing economies, he felt.. “It has the potential to disrupt trade and lead to financial contagion,” Mukherjee said.