Pranab upbeat on growth

Assuring US investors that India offered huge opportunity for investment amid a global slowdown, Union finance minister Pranab Mukherjee on Thursday pegged the country’s economic growth rate at eight per cent in 2011-12.

“We will have eight per cent growth even this year, though the first quarter growth figure is 7.7 per cent,” he told reporters in New York after meeting leading industrialists at an investment forum. Though the suggested rate is less than the 8.6 per cent in 2010-11, it is not so bad, given the performance of economies elsewhere, analysts said. The minister said a good monsoon could ensure agricultural growth of about “four per cent-plus” and growth in the manufacturing and service sector “clearly indicates it will be possible for the country to have growth at around 8 per cent for this year”.

Mukherjee said India had projected nine per cent growth for the 12th Five-Year Plan (2012-13 to 2016-17) and the country was taking the steps needed to ensure the momentum continued. He said inflationary pressure and forex volatility in emerging markets was “posing serious concerns, but at the same time, as the collective leadership of the international community has been able to address the problems (that) arose out of 2008 crisis, we will be able to overcome this current crisis”.

Mukherjee will be in Washington for the anual meetings of the International Monetary Fund and the World Bank, as well as a meeting with counterparts from the BRICS (Brazil, Russia, India, China and South Africa) grouping. The five governments would review the global situation and try for a common approach to issues that will be debated at the IMF-World Bank meeting.

Mukherjee said his top priority in the coming months was to get legislation approved by both Houses of Parliament, “which will make a sea change and unleash a second generation of reform”.

He said he was interested in pushing through an amendment to the Constitution that would facilitate the introduction of a uniform Goods and Services Tax across the country. Mukherjee hoped other legislation to spur investment from abroad in sectors such as insurance and banking would get approval from Parliament in its coming winter session, so that he could include appropriate provisions in the next Budget.

“We are working to build a policy consensus on a number of pending issues, such as introduction of a goods and services tax, a new national manufacturing policy, further liberalisation of FDI (foreign direct investment), including (in) retail, and strengthening financial markets for long-term investments,” he said.

On the US-India civil nuclear agreement, Mukherjee indicated that in the light of apprehensions raised by the parties concerned on the Civil Nuclear Liability Bill, there was a possibility of these being addressed in the final Act passed by Parliament. At the USIBC-Ficci roundtable, he said the country offered huge scope for US firms to participate in its $1 trillion infrastructure development plan.

“Long-term investment opportunities have opened up in the Delhi-Mumbai Industrial Corridor and Delhi-Mumbai dedicated rail freight corridor,” he said.