Union Finance Minister Shri Pranab Mukherjee held a meeting with noted economists to get their inputs for General Budget 2011-12, here today. This was the fifth meeting in the series of pre-Budget consultations held by Finance Minister with the stakeholders of different sectors.
First meeting was held on 7th January with the stakeholders of agriculture sector followed by meetings with captains of Indian industry on 11th January, representatives of different trade unions on 12th January, 2011 and with different NGOs on last Friday i.e., 14th January, 2010.
While welcoming the economists, in his opening remarks, the Finance Minister, Shri Pranab Mukherjee said that he was keen to have this meeting with Economists as a part of his pre-budget consultation for the preparation of Union Budget 2011-12. He said that he greatly value thier knowledge, experience and exposure to diverse issues, some of which our economy is confronting at present. Shri Mukherjee said that he expects their inputs to help in Budget making and improving the policy management of the economy in the coming months.
Finance Minister, Shri Mukherjee said that we have been fortunate in surviving the global financial crisis without major disruptions and have recovered our growth momentum much faster than most others. In the first half of 2010-11 the Indian economy recorded an overall GDP growth of 8.9 per cent which takes us back on the high growth path that the economy was traversing on in the years prior to the crisis, he said. Shri Mukherjee said that the recovery has been broad based with agriculture, industry and services all contributing to the consolidation of the growth momentum.
Finance Minister, Shri Mukherjee said that the industry has driven the recovery process so far. Though industrial growth during the month of November 2010 has slipped to 2.7 per cent, cumulative growth during April-November 2010-11 is still high at 9.5 per cent compared to 7.4 per cent during the corresponding months of 2009-10, he said. Shri Mukherjee said that with normal monsoons, we are looking at a significant rebound in agriculture and allied sector growth at about 6 per cent. Exports have also done reasonably well with export growth in April-November 2010 at 26.7 percent, said the Minister.
Shri Mukherjee said that this resilience that India has demonstrated in recent times reflects a maturing of the economic management of the country and the growing competitiveness of our enterprise. He said that this has happened even as the economy has become more integrated with global markets.
Finance Minister, Shri Mukherjee said that economic recovery was driven by a deliberate fiscal expansion during and immediately after the global crisis and supported by monetary policy easing. With a broad-based recovery underway, a calibrated exit of stimulus is being implemented as a part of the Budget 2010-11, he said . The Minister further said that the progress in reduction in fiscal deficit for the year 2010-11 is in line with the commitment made in the medium-term fiscal policy statement.
Shri Mukherjee said that this rapid recovery of the growth momentum is comforting, but we cannot be complacent as there are several challenges that the Indian economy faces from its current external and domestic context. Global recovery remains fragile. He said that India’s growth momentum, to some extent, is affected by developments in the western world. A faster recovery in the west is in the global interest, he said. The Minister further said that the creeping increase in international crude oil and other commodity prices is a reality that we are already confronting. High food prices, caused in part by severe drought conditions last year, and by rising incomes, have been driving inflation in India. Other countries are also experiencing rising food inflation, he said. Shri Mukherjee said that there has been significant increase in FII inflows even as there has been some moderation in FDI flows. He said that the challenge before the Government and the monetary authority has been to support the recovery process without compromising on price stability. The task has not been easy, the Minister said.
Shri Mukherjee said that our emphasis is on ‘inclusive development’ and we want the growth process to especially empower and enrich the poorer sections of society. The Government is keen to upgrade the delivery mechanisms in the health and education sectors so that the disadvantaged sections of society are well equipped to benefit from the growth process, he said. The Finance Minister said that we recognize that the demographic dividend will only work for India if our population is healthy, educated and appropriately skilled. Later Shri Mukherjee asked the economists to give their specific suggestions to address the short and medium term concerns of our economy.
Among the economists who attended the meeting include Dr. Partha Sen and Prof. Pulin Nayak both from Delhi School of Economics, Dr. Rajiv Kumar from FICCI, Dr. Ashima Goyal from IGIDR, Prof., Dr. Deshpande from Institute for Socio Economic Change, Shri Ajit Ranade from Aditya Birla Group, Shri Bharat Ramaswamy, ISI, Delhi and Shri Pulapare Balakrishnan from Centre for Development Studies.