Terming decline in economic growth rate to nine-year low of 6.5 per cent in 2011-12 as "disappointing", Finance Minister Pranab Mukherjee on Thursday said the Indian government will take "necessary steps" to improve growth.
"The government would take all necessary steps to address imbalance on the fiscal front and on the current account. It would help in checking inflationary expectations and inspire confidence for improved capital inflows as well as recovery in domestic investment growth," the Minister said in a statement.
Mukherjee was commenting on the GDP data which showed that the growth rate during 2011-12 declined to 6.5 per cent from 8.4 per cent in the preceding two fiscals.
Attributing the slowdown to tight monetary policy, rising interest rates, weak global sentiments and environmental issues in the mining sector, Mukherjee expressed the hope that the situation would improve as "most of the factors have bottomed out."
He further said, "The (interest) rate cycle has been reversed; mining sector growth has turned around; progress has been made on fuel linkage of coal-based power projects; a turnaround in the investment growth rate in the fourth quarter, which had been negative..."
He also talked about other factors, the forecast of normal South West monsoon for 2012-13 and no major adverse results on corporate performance in January-March, which would help bringing growth back on track.
Meanwhile, Planning Commission Deputy Chairman Montek Singh Ahluwalia said, "It is obvious that the last quarter (growth) was disappointingly low. So, the slowdown is more than what we thought...We have to do something about it."
The output of mining and quarrying sector declined by 0.9 per cent last fiscal, as against the positive growth of 5 per cent in 2010-11, according to the data released by the Central Statistical Organisation (CSO).