Economy set for rebound: Pranab
Finance minister Pranab Mukherjee on Monday said India's economy is heading for a “turnaround” in 2012-13, exuding optimism even as government's key trouble shooters struggle for options to put it back on a high growth path. HT reports. Four factors that could revive growth storydelhi Updated: Jun 12, 2012 00:55 IST
Finance minister Pranab Mukherjee on Monday said India's economy is heading for a “turnaround” in 2012-13, exuding optimism even as government's key trouble shooters struggle for options to put it back on a high growth path, buffeted by political compulsions and a wobbly external trade situation.
India’s gross domestic product — or the value of all goods and services produced in the country — grew by a worrisome 5.3% during the January-March, the lowest since January-March 2003, hit by a staggering manufacturing sector that contracted (-)3.5% in March, the lowest in five months by 0.3%, data released recently showed.
“We are taking all necessary steps to ensure that we come back to the path of the targeted GDP growth,” Mukherjee said at a conference of top officials of the income tax department. “Of course it will take some time...but from this year we expect to make a turnaround.”
Mukherjee said the interest rate cycle had reversed and there was growth in the mining sector, with a turnaround in the rate of investment growth. He added there are predictions of normal monsoon, besides decline in crude oil prices, indicating the grounds for his optimism.
“All these factors should help in recovery of domestic growth momentum,” said Mukherjee.
In the continuing tug-of-war between rising prices and sliding growth, the Reserve Bank of India (RBI) last month slashed the repo rate, its main lending rate, by 0.50 percentage points to 8% or the first time in nearly three years.
Mukherjee said the direct tax collection target of Rs 570,000 crore for 2012-13, up from last years Rs 495,000 crore, was achievable, although low corporate profits may hurt tax collections.
“I do feel this target is moderate and can be achieved,” said Mukherjee.