GDP growth will surpass 8.75 percent target: Mukherjee


New Delhi: The Indian economy will grow more than 8.75 percent in the current fiscal helped by strong growth in the manufacturing sector, Finance Minister Pranab Mukherjee said Thursday.

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“At the end of this year we will surpass the growth target of 8.5 to 8.75 percent given in the Economic Survey,” Mukherjee said at a meeting of Indo-German Joint Commission on Industrial and Economic Cooperation.

He pointed out that Indian economy grew by 8.8 percent in the first quarter of fiscal 2010-11 led by 12.4 percent growth in manufacturing sector.

“This is a significant turnaround. Our growth was affected in the previous fiscal. 8.8 percent growth in the first quarter of the current fiscal is very encouraging,” said Mukherjee, adding upswing in manufacturing sector and huge investment in infrastructure would boost GDP growth in the coming quarters.

During the first quarter of fiscal 2009-10 India’s GDP growth slowed to 6 percent mainly because of the global financial and economic crisis. However, growth rebounded towards the end of last fiscal on the back of government stimulus in the form of increased public expenditure and lower taxes. Indian economy grew 7.4 percent in fiscal 2009-10.

Finance minister said the government would try to keep fiscal deficit below 5.5 percent of GDP during the current financial year.

He also reiterated the government’s commitment to increase spending on infrastructure projects, especially in the sectors like power, roads and ports, which are crucially important for sustaining growth.