By IANS,
New Delhi : Inflation will remain in the range of 6-7 percent in the current financial year, Finance Minister Pranab Mukherjee said Tuesday adding a slowdown in industrial output and general price rise remained major concerns for economic policymakers.
“Government has been making all efforts to address the demand and supply-side related problems and I am confident that during the current financial year the rate of inflation would see some moderation and remain within the 6 to 7 percent range,” Mukherjee said at the annual general meeting of the Confederation of Indian Industry (CII) here.
The finance minister said a sharp slowdown in economic growth in 2011-12 was disappointing and the government was expecting a turnaround in the current financial year.
“The slowdown in the growth of the economy in 2011-12 is mainly on account of the slowdown in the industrial sector that registered a growth rate of 3.9 percent in 2011-12 as against 7.2 percent in 2010-11 and a moderate growth of 2.5 percent in agriculture sector following a high growth rate of 7 percent in 2010-11,” he said.
Services sector registered relatively robust growth of 9.4 percent in 2011-12.
India’s gross domestic product (GDP) growth is estimated to fall to 6.9 percent in 2011-12 as compared to 8.4 percent in the previous years.
In the union budget, the finance minister has projected GDP growth of 7.6 percent with a range of (plus/minus 0.25 percent) for the current financial year.
Mukherjee said global economic situation continued to remain volatile and there was need to be prepared to confront external shocks. “We need to be ever ready to confront external shocks and respond on a real time basis.”
The finance minister said the government was concerned about the recent slowdown in industrial output.
Industrial output growth, measured in terms of the Index of Industrial production (IIP), fell to 4.1 percent in February, according to the official data released last week.
Cumulative growth of industrial output fell to 3.5 percent in April-February 2011-12 as compared to 8.1 percent during the corresponding period in the previous year.
“The slowdown can be attributed both to domestic and global factors. Domestic factors, namely the tightening of monetary policy, in order to control inflation resulted in slowing down of investment and growth, in the industrial sector,” he said.