2010.09.2401:30:00UTC+00Indian Economy To Grow By 8.75% In FY11 - FM

Finance Minister Pranab Mukherjee was optimistic on Thursday that the Indian economy would exceed the 8.75 per cent growth this fiscal projected by the economic survey, say reports. Addressing a function on Indo-German Industrial and Economic co-operation in New Delhi, he said, "I am optimistic that at the end of this year we will be able to surpass our GDP growth forecast of 8.5-8.75 per cent given in the Economic Survey."

He, however, cautioned that infrastructure posed a challenge to achieve a bigger growth of 9-10 per cent, and invited German companies to actively participate in the public-private-partnership model to expand core sector industries.

Indian economic growth rate in 2008-09 dropped to 6.7 percent from the 9 per cent of the previous three years, due to global financial meltdown. The government initiated remedial measures, including lowering taxes and stepping up public expenditure, to overcome the crisis.

Mukherjee said the economy grew by 7.4 per cent in 2009-10, driven by the robust performance of the manufacturing sector on the back of spending by the government and consumers.

In the first quarter of this fiscal, the Indian economy grew by 8.8 per cent, compared to the six per cent a year ago. The first-quarter growth this fiscal was encouraging, particularly since the government partially withdrew the stimulus by raising excise duty to 10 per cent, he said.

The Finance Minister said rising demand for energy was one other important challenge for economic growth. The availability of energy was crucial for attaining 9-10 per cent growth rate, as one per cent growth needed 0.8 per cent increase in the availability of energy.

India proposed generating 30,000 MW of power from renewable sources of energy, including 20,000 MW from solar power by 2022, he said, and invited German companies to collaborate in these areas.

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