Economy to grow 7.75% but inflation a worry: Pranab

Economy to grow 7.75% but inflation a worry: Pranab

Calls upon states to extend cooperation

Economy to grow 7.75% but inflation a worry: Pranab

Union Finance Minister Pranab Mukherjee at the pre-budget meeting with Finance Ministers of all States and Union Territories in New Delhi on Wednesday. PTI

In a pre-Budget interaction with states finance ministers, Union Finance Minister Pranab Mukherjee pointed out that there was enough wheat and rice stocks and proposed open market sale for offloading of these stocks to increase availability in the market, which would in turn ease prices.

"A major area of concern is high food inflation; WPI index increased by 19.79 per cent, therefore collaborative efforts of the central and state governments are required to tackle this problem... Offtake of surplus stock by the state governments are not satisfactory. Therefore, all the state governments may cooperate in this regard to lift these surplus stock alloted to them," Mukherjee said at the meeting.

He also called for efforts to increase farm productivity. Mukherjee said that economic recovery will be a collaborative effort of the centre and the states.

Economic growth stood at 7 per cent during the first half of the current fiscal, Mukherjee said, pegging GDP growth for the whole fiscal at around 7.75 per cent -- a number that exceeds the initial estimates of the government as well as the RBI.

The Union Finance Minister asked the state governments to utilise the cash surplus for development activities.

RBI to check uneven recovery

The Reserve Bank said that the growth pattern suggests that economic revival is uneven and its forthcoming monetary policy stance would be to support recovery and manage inflation, reports PTI from Mumbai.

“There is still an imbalance in the pattern of growth. This does not mean that recovery is not happening. But it does say that the recovery is uneven,” RBI Deputy Governor Subir Gokarn said.