The government today exuded the confidence that the economy would grow at a pace higher than the 7.2% estimated by the statistical department for this fiscal as economic activities were picking up.
Even 7.2% growth is not discouraging in the context of subdued economic environment globally, finance minister Pranab Mukherjee told reporters on the sidelines of a meeting on the Colombo Plan - a grouping of nations for economic and social improvement in south and southeast Asia.
"When the final figures come, particularly for the third quarter, I think there may be improvement (over Central Statistical Organisation's estimate of 7.2%). Anyway, 7.2% in the current situation is not bad," he said.
Referring to advance estimates of CSO last fiscal, Mukherjee said it had estimated 6.5% growth for 2008- 09, but ultimately it turned out to be 6.7%.
Earlier in his speech, the finance minister referred to the Economic Survey's projection of up to 7.75% for the current fiscal and said that the economy is expected to grow in the upper band of the projections made by analysts.
"The Economic Survey 2008-09 had indicated that the upper band of growth in real GDP for the year 2009-10 could be around 7.75%. The growth outlook for the next two quarters and for the whole year is expected to be in the upper range of most predictions for the Indian economy," he said.
Mukherjee said along with all other economies, India too was forced to downgrade its growth projections due to the impact of global financial crisis.
"Despite the stress, India has been able to withstand the recessionary trend better than most other economies and is a
front-runner in leading the global recovery process," he said.
India's economic growth slowed down to 6.7% last fiscal, down 2.1 per cent from the average growth rate per annum in the preceding five years.
With global financial crisis deepening after the collapse of US financial services icon Lehman Brothers in September 2008, the government unveiled stimulus packages to perk up the economy through duty cuts and increase in plan expenditure.
This yielded results with the economy growing by 7.9% in the second quarter of this fiscal against 6.1% in the preceding quarter and 5.8 per cent each in the previous two quarters.
Mukherjee said, "It (India's economic growth) vindicates the timely policy measures taken by the government to mitigate the adverse impact of the financial crisis on India and the positive response of all stakeholders and partners in development."
CSO in its advance estimates pegged the economic growth rate at 7.2% for this fiscal, while mid-year economic review projected it to be 7.75% and prime minister Manmohan Singh and RBI have said it may be 7.5%.
Recently the Centre for Monitoring Indian Economy had forecast that the economy would grow at 7.75% for this fiscal, while International Monetary Fund had projected it at 6.75%.
The finance minister said rising domestic savings and investments and a nationwide emphasis on skill upgrading and
development gives him the confidence that growth rates can be
pushed up even higher to fully leverage demographic dividend.
However, he also pointed that infrastructure has to be upgraded in sustaining high growth rates.
"It is estimated that investment requirement in the infrastructure sector would be of the order of USD 514 billion during the five year period between 2007 and 2012," Mukherjee said.
Here, he emphasised on the public-private-partnership model for upgrading infrastructure, which is also a theme of consultative meeting of the Colombo Plan here.
He said 450 PPP projects are being implemented in various parts of the country with an estimated project cost of USD 47.7 billion.
Finance secretary Ashok Chawla said global financial meltdown has demonstrated that financial markets need sensitive tackling and regulations.
India has earlier hosted the Consultative Committee Meetings in 1953 and 1972.
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