“While drafting the economic survey for 2010-11, (Chief Economic Adviser to the Finance Ministry) Kaushik (Basu) had predicted a growth of about 8.5 per cent. I am confident that with luck, it may be surpassed,” Mukherjee said at the 101st Annual General Meeting of the Bharat Chamber of Commerce held on Saturday.
In the first two quarters this fiscal, the economy grew by 8.9 per cent.
Mukherjee said he did not believe that 8.9 per cent expansion in the second quarter of this fiscal could be achieved from a growth rate of 5.5 per cent in 2008-09.
The government’s Mid-Year Analysis has projected the economy to grow by up to over nine per cent this fiscal.
Mukherjee said although the economy had withstood the international financial crisis with fortitude and was now the fastest growing economy after China, there were challenges to the country’s aspiration for growth in double digits.
If nine per cent growth projected in the Mid-Year Analysis is met, the Indian economy would expand at a pace registered during the three years prior to the global financial crisis.
Observing that there were inflationary pressures on agriculture, he said in the past six-and-a-half years, the government had raised the minimum support price of rice and wheat to encourage farmers to grow more.
Incidentally, food inflation was back in double digits after three weeks in December. The inflation was 12.13 per cent for the week ended December 11.
Earlier on Thursday, Mukherjee had said, “I am afraid there has been some upward movement of food items... of course the weekly fluctuations take place and one of the reason may be the high prices of onion, which (we already) have taken steps”.
The wholesale price based inflation for November stood at 7.48 per cent. Economists, however, expect the inflation number for December to be higher as high food prices and the impact of petrol price hike would be taken into account. State-owned oil companies hiked petrol prices on December 15.
It may be noted that food inflation index constitutes over 14 per cent of the overall WPI inflation.
Mukherjee said inflation would stand at a ‘managable’ level of 6.5 per cent by the end of the current fiscal.
Admitting that price fluctuation of perishable fruits and vegetables resulted in price rise, he expressed need for cold chains and scientific storage facilities.