Indian economy to grow by 8% in FY11: PM

Prime Minister Dr. Manmohan Singh said that the Indian economy would grow by at least 8% in the fiscal year that ends in March 2011. Asia's third largest economy would expand by 7.2-7.5% in 2009-10, he told parliament. The Rabi winter crop prospects are very encouraging, but the country needs to pay farmers a good price for their produce to boost output further, the Prime Minister said. Dr. Singh said that the Government would take all practical measures to bring down food prices.

Rising prices of essential commodities was a byproduct of global inflation and that his government was sensitive towards the issue, the Prime Minister said, speaking on the motion of thanks to President Pratibha Patil for her address to the joint session of parliament. "I will be the last one to deny that the behaviour of food prices in the last one year is something which doesn't worry us. We have been worried. The house has my assurance that if any practical methods can further bring relief to our people our government will always be sensitive to the concerns of the house," Dr. Singh said.

"There is first the effect of international commodities prices which have gone up and India is no longer a closed economy.... In years of shortage we depend on import of sugar, pulses.... And when international prices of these commodities rise, I think there is inevitably an impact on our country," he said. The Prime Minister said that the fundamentals of the Indian economy were sound and there was no barrier that could prevent India from achieving the elusive double-digit growth target.

Meanwhile, the Government sought parliamentary approval to spend an extra Rs317.8bn (US$6.94bn) for the fiscal year ending this month, which it plans to fund through savings. Of the total spending, Rs120bn would be spent on oil subsidy, Rs80bn on fertiliser subsidy and Rs24.59bn on food subsidy, among others. The Centre also sought parliament's nod for Rs13.67 trillion for debt repayment in 2009-10. Separately, the country's Revenue Secretary Sunil Mitra said today that the Government would introduce a bill for the implementation of the proposed Direct Tax Code (DTC) in the monsoon session of parliament