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Budget 2012: Economy on cusp of revival, says Pranab

Finance Minister Pranab Mukherjee on Friday said the growth of the Indian economy estimated at 6.9 per cent during this fiscal year was "disappointing" as he started presenting what was his seventh federal budget in the Lok Sabha.

BT Online Bureau   New Delhi     Last Updated: March 16, 2012  | 11:52 IST

Finance Minister Pranab Mukherjee on Friday said the growth of the Indian economy estimated at 6.9 per cent during this fiscal year was "disappointing" as he started presenting what was his seventh federal budget in the Lok Sabha.

"The global crisis has affected us. India's gross domestic product (GDP) is expected to grow at 6.9 percent in 2011-12, after having grown at 8.4 percent in each of the two preceding years," the finance minister said.

FULL COVERAGE: UNION BUDGET 2012

"Though we have been able to limit the adverse impact of the slowdown in our economy, this year's performance has been disappointing. But it is also a fact that in any cross-country comparison, India still remains among the front-runners in economic growth."

At the same time, Mukherjee also said that the Indian economy was at the cusp of a revival, as agriculture and services had continued to grow at a decent pace. It was industrial performance that was acting as a drag.

READ:Economic Survey exudes hope, optimism


"While we do not have the aggregate figures for the last quarter of 2011-12, numerous indicators pertaining to this period suggest that the economy is now turning around. There are signs of recovery in coal, fertiliser, cement and electricity sectors."

Mukherjee said as India enters the 12th Five Year Plan, beginning April 1, the focus of his government would be on five key areas:

- Frame policies that trigger domestic demand recovery

- Ensure rapid rise in private investment

- Remove bottlenecks in agriculture, energy, transport, coal, power and national highways

- Address malnutrition

- Find ways to expedite implementation of decision, prompt delivery and good governance with transparency, while curbing black money and corruption

Other Highlights of the Budget for 2012-13

* Fiscal 2011-12 year of recovery interrupted; reality turned out to be different.

* GDP growth in 2011-12 estimated at 6.9 percent; had to battle double digit inflation for two years.

* Agriculture and services continued to perform well; economy is now turning around; recovery in core sectors.

* Now at juncture where it is necessary to take hard decisions; have to accelerate pace of reforms.

* India's inflation structural, driven largely by agricultural constraints.

* Current account deficit 3.6 percent in 2011-12; this put pressure on exchange rate.

* Growth in 2012-13 estimated at 7.6 percent; expect inflation to be lower.

* Better monitoring of expenditure on government schemes.

* Fiscal 2011-12 year of recovery interrupted; reality turned out to be different.

* GDP growth in 2011-12 estimated at 6.9 percent; had to battle double digit inflation for two years.

* Good news: agriculture and services continued to perform well; economy is now turning around; recovery in core sectors.

* Now at juncture where it is necessary to take hard decisions; have to accelerate pace of reforms.



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