Finance Minister Pranab Mukherjee said while the Indian economy is on a growth trajectory, areas of concern are the current account deficit and volatility of foreign inflows. And, that the turmoil in the euro zone could have some impact on our growth, by affecting the trade balance.
The economy registered an annual average growth in gross domestic product of 9.5 per cent in the three years from 2005-06 to 2007-08. The global economic slowdown lowered the growth rate to 6.7 per cent in 2008-09, but it recovered in 2009-10 to 7.4 per cent and touched 8.9 per cent during the first half of 2010-11.
The finance minister said the recovery was broad-based, with agriculture, industry, manufacturing and services all contributing to the consolidation. He said the economy had become remarkably resilient to both external and domestic shocks. It not only recovered rapidly from the global economic downturn and other external shocks, but also took the monsoon failure of last year in its stride and was now showing robust.
He said with the normal rainfall this year, kharif production was expected to rise by 10 per cent, year on year, for food grains and even more for cash crops such as cotton and sugarcane.
On inflation, Mukherjee said it was under control, as the government took several fiscal and administrative measures to contain price rise. The minister said there was a need to improve the Public Distribution System, so that people below the poverty line got grain at Rs 2 per kg for wheat and Rs 3 a kg for rice.