Indian Economy to return to robust growth path in 2-3 years: Manmohan

Cautioning the opposition against dampening the spirit of economy, Prime Minister Manmohan Singh today said government has taken a number of steps to return to the robust growth path in the next two to three years.

Replying to supplementaries during Question Hour, the Prime Minister admitted that there has been a slowdown in the economy which has been reflected in the GDP figures.

"Nothing is achieved by dampening the spirit...We have taken steps and in 2-3 years we will return the economy to the robust growth path," Singh said as members of the BJP
and Left parties voiced concern over the slowdown in the economy.

Shahnawaz Hussain (BJP) and Gurudas Dasgupta (CPI) had demanded that the Prime Minister reply to questions on the slowdown of economy and not Minister of State for Planning Rajiv Shukla as he was "not an economist".

"It is certainly true that in the last two years there has been a slowdown in the economy and it has been reflected in the GDP. In the Economic Survey of 2012-13 and the Finance Minister's budget speech, we have explained at length the factors that are responsible for the slowdown," Singh said.

He said there were international factors as the world faced two crises -- the banking crisis of 2008-09 and the Eurozone crisis.

"These things do affect the economy. There were domestic issues as well. We are trying to tackle the crisis," he said.

Finance Minister P Chidambaram later refuted Dasgupta's claims that India remained unaffected by the global financial crisis of 2008.

"The crisis of 2008 did not end in 2009. It deepened in 2011-12. It continues to envelop the whole world. We cannot be unaffected by these crises," he said, adding, 44 per cent of the GDP comprises imports and exports and 8 per cent was capital inflows and outflows.

"It is not a correct assessment that we were not affected by the 2008 banking crisis.     The government gave stimulus packages for three years which gave us high growth. But this resulted in increase in fiscal deficit which in turn led to high inflation. Inflation increases when the FDI increases," Chidambaram said.

He said the government has worked out a package of measures to restart the growth engine.

The Finance Minister said the consumer price index (CPI), of the inflation that affected the people, was high at over 10 per cent because the government had increased the minimum support price of foodgrains.

He said while the core inflation or wholesale price index has come down, the CPI was high at over 10 per cent.

"CPI is driven by food inflation. Cereal inflation is high because of high MSP, pulses inflation is high because of demand and supply gap," he said.

"We are trying to pump in more pulses. No government has doubled the MSP in five years. The NDA government had hiked MSP at the rate of Rs 10 per year," Chidambaram said.

He said government was taking steps to improve distribution and logistics chains for fruits and vegetables.