FM sees over 7% growth in FY11, 9% in FY12

Finance Minister Pranab Mukherjee said that he is hopeful of more than 7% growth in the fiscal year ending March 2011 and 9% growth in fiscal year 2012. He was speaking at the World Economic Forum's India Economic summit in New Delhi. India's economic growth slowed to 6.7% in the fiscal year ended March 2009 after three straight years of 9% plus expansion. Government officials and the Reserve Bank of India (RBI) are looking at a GDP growth rate of 6-6.5% this fiscal.
The Government will focus on driving domestic demand until key developed markets recover and will not exit fiscal stimulus measures until necessary, the Finance Minister said. "There is a need of generating strong domestic demand until the robust recovery all over the world, particularly the developed world takes place," he said. Mukherjee reiterated his pledge to pump massive investments in agriculture and infrastructure, and acknowledged that it would not be easy for Asia's third largest economy to compensate for the loss in exports through domestic demand.
"It is not easy for us to diversify the market overnight and make up the loss so we shall have to wait for some time," he said. "This cannot continue for a long period of time," Mukherjee said, referring to the exit from easy fiscal policy. "I have stated a number of times that in due course we shall have to take the corrective measures." He also said that he was not worried about the availability of foodgrains and the Government would continue to import food to meet any supply shortfall.