India’s FY12 GDP to drop to 7%: PM/news09012012

Prime Minister Manmohan Singh said the country was passing through difficult times and the economic growth in the current fiscal would be 7%, down from 8.5% a year ago.

'Our country is going through difficult times ... We are up to the task of meeting these challenges we face as a nation,' he said while addressing the 10th Pravasi Bharatiya Divas being attended by over 1,900 overseas Indians.

Despite an adverse international environment, Singh said, 'the Indian economy is expected to grow by about 7% this financial year ending March 31.'

The country recorded a Gross Domestic Product ( GDP) growth rate of 8.5% in 2010-11 and was initially estimated to grow by 9% in the current fiscal. The growth rate projection, however, was scaled down gradually by the Reserve Bank as well as the Finance Ministry.

Although Finance Minister Pranab Mukherjee had on Saturday said the growth rate in 2011-12 would be about 7.5%, Singh further lowered the projection to 7%.

The growth rate in the first half of the year slipped to 7.3% from 8.6% in the year ago period.

The Prime Minister, however, exuded the confidence that growth rate in the coming years would go up to 9-10% as the 'economic fundamentals are strong and ...constitutional processes are robust'.

'...we hope to bring back the rhythm of our growth process to sustain an annual growth rate of 9-10% in the medium-term. Our domestic savings rate which currently stands at 33-35% of our GDP will greatly facilitate the realisation of our growth objectives', he said.

Referring to his government's decision to allow Non-Resident Indians to vote in elections, he said pursuant to the law in this regard the government has issued notifications for registration of overseas Indians under the Representation of People Act, 1950. 'This constitutes the first major step to enable Indians resident abroad to participate in our election processes,' he said.

On the economy front, Singh said despite an 'adverse international environment', India's economy is expected to grow at 7% this year as against 8.5% last year. However, he expressed optimism that the rhythm of growth process would be brought back to 9 to 10% in the 'medium term. 'Our country is also going through difficult times. Nonetheless, our economic fundamentals are strong and our constitutional processes robust. We are up to the task of meeting these challenges. Despite an adverse international environment, the Indian economy is expected to grow by about 7% this financial year,' Singh said.
....more info