He said that the challenge of sustaining high growth has become more complex because of rapid globalisation and economic as well as non-economic development on routine domestic concerns.
The Finance Minister said that India’s overall GDP growth in 2010-11 with a broad based performance covering all the three sectors of the economy has been estimated at 8.5 per cent. The economy is expected to maintain the momentum at the same level in 2011-12, the Minister added.
While delivering keynote address at a Conference on US-India Economic and Financial Partnership in here on Monday, Mukhrjee said that the policy makers have to be far more alert and prompt with their response.
He was sharing the dais with Mr Timothy Geithner, Secretary, US Department of Treasury. The daylong conference was organised by Confederation of Indian Industry (CII) in collaboration with Brookings Institute of US.
The Mukherjee said that India’s economic reforms have contributed to the Indian growth story. He said that that though the global financial crisis of 2008 lowered the GDP growth rate in India to 6.8 per cent in 2008-09 yet the Indian economy rallied back with an 8 per cent growth in 2009-10.
The Union Finance Minister Shri Pranab Mukherjee said that the experience in the post-2004 period shows that Indian economy has become remarkably resilient to both external and domestic shocks. It managed to moderate the decline in GDP growth during the global economic downturn and recovered rapidly in 2009-10, the Minister added.
He said that it also took the monsoon failures in the preceding two years in its stride and is now showing robust growth with agriculture production set to record a new high in 2010-11.
Mukherjee also refuted observations by US think-tanks that government and industry in India has gone slow on economic reforms. He said that a series of reforms were in the process, which will lead to the next round of growth.
Finance Minister observed that reforms in India require political consensus and the UPA government is committed to it.
Mr. Mukherjee said that inflation poses a major challenge to the Indian economy and projected that the rate of inflation is going to be more than 6.5 per cent this year.
Observing that India and the US are at the threshold of unlocking the great potential of their bilateral economic relationship, Treasury Secretary Timothy Geithner urged New Delhi to accelerate next generation reform to spur the growth of the Indian economy.
Mr. Geithner acknowledged that the most rapidly growing companies in the US are those that benefit from growing exports to India.
He said India’s economic expansion does not threaten the US and is helping the American economy’s recovery.
