Downturn ending, chin up: PM

Prime Minister Manmohan Singh on Tuesday asked his cabinet colleagues and key macroeconomic managers not to be "over-pessimistic”. The fallout of the drought and rising food prices, as well as the task of sustaining growth in an uncertain economic environment dominated discussions at the meeting of the Planning Commission that Singh chaired. HT reports. See graphics

Prime Minister Manmohan Singh on Tuesday asked his cabinet colleagues and key macroeconomic managers not to be "over-pessimistic”.

HT Image

The fallout of the drought and rising food prices, as well as the task of sustaining growth in an uncertain economic environment dominated discussions at the meeting of the Planning Commission that Singh chaired. “We have to pay careful attention to the management of the food economy and the overall macro economy,” Singh said.

He admitted there were lingering effects of the global slowdown and temporary effect of the drought in the current year, particularly on agricultural output, but exuded confidence that "strengths built up over several years”, and adequate food stocks would help the country tide over the crisis.

India currently has a buffer foodgrain stock of 50 million tonnes, enough to meet the country’s needs for 13 months.

Singh’s remarks came a day after data showed that gross domestic product (GDP) for April-June quarter had grown at 6.1 per cent, up from 5.8 per cent in the previous quarter.

Scanty rainfall, however, is threatening to upset the recovery with more than 272 districts announced drought affected.

There has been sharp rise in food prices in recent months, with consumer price inflation reaching 11.9 per cent in July, the highest in a decade.