Finance Minister Pranab Mukherjee today said that the Indian economy is expected to grow at over 8.5 per cent in the current fiscal on the back of strong factory and foodgrain output.
"My projection in the Budget was that for year 2010-11 8.5 to 8.75 per cent (GDP growth) and I am sticking to that position," Mukherjee told NDTV in an interview.
Indian economic growth slowed to 6.7 per cent in 2008-09 from 9 per cent in the previous three years in the aftermath of the global financial crisis.
To blunt the impact of the global crisis, the government provided stimulus to the economy by cutting taxes and stepping up public expenditure. This catapulted economic growth to 7.4 per cent last fiscal, despite just 0.2 per cent farm growth because of the drought in many parts of the country.
The Finance Minister said that all macroeconomic indicators are pointing at a GDP growth of over 8.5 per cent in the current fiscal.
"The growth scenario which is being unfolded now...You have noticed all the important ingredients have started moving up," he said.
Industry, particularly manufacturing, is having double digit growth, he said, adding, agriculture is also looking up.
Talking about inflation, Mukherjee said, it is always a matter of concern in any developing country because inflation hits the poor the hardest.
He said it has been the government's endeavour to keep inflation at a moderate level but at the same time maintain a balance between keeping prices low and growth.
Inflation stood at 8.5 per cent in August as per the new base year 2004-05.
As per the new series, inflation fell 1.3 percentage points from July level of 9.8 per cent.
To rein in inflation, RBI raised its key short-term lending rate by 25 basis points and borrowing rate by 50 basis points last week.