Economy likely to grow at 7.3% this year: FM

Finance Minister Pranab Mukherjee on Wednesday said the Indian economy is likely to grow at around 7.3 per cent in the current fiscal, compared to 8.5 percent in 2010-11, as the GDP growth slumped to a two-year low of 6.9 per cent for the quarter ended Sep 30.

"Taking into account the two quarters together, it now appears that it (growth) will be around 7.3 per cent," Mukherjee told reporters here while reacting to the second quarter growth numbers.

India's economic growth slumped to 6.9 per cent in July-September 2011, the slowest in over two years, due to poor performance of the manufacturing and mining sectors.

The economy had grown 8.4 per cent during the corresponding quarter of last year and 7.7 per cent in the first quarter of the current fiscal.

The gross domestic product (GDP) growth in the first six months of the current financial year slowed to 7.3 per cent from 8.6 per cent during the same period of last fiscal, official data showed Wednesday.

"Had it been 10 years ago, this would have elated me, but today I cannot have that satisfaction because we reached the higher trajectory of growth, from there we are slipping," Mukherjee said.

The finance minister said the government would do its best to improve the situation. "Nonetheless, we shall have to try to face the situation and to see what best we can do at this given situation," he said.

According to the data released by the ministry of statistics and programme implementation, the growth during July-September was the lowest since the 6.3 per cent expansion in the April-June quarter in 2009.

Mukherjee said the overall GDP growth has slowed in the last two quarters mainly because of poor performance of the mining and manufacturing sectors.

Growth of the manufacturing sector slumped to 2.7 per cent for the quarter ended Sep 30, 2011, as compared to 7.8 per cent during the like quarter of the last fiscal.

The mining sector growth slowed to 3.2 per cent during the quarter under review from 8 per cent during the corresponding quarter of 2010-11.

The finance minister said turbulence in the global economy, especially in the eurozone, and slowdown in industrial output has negatively impacted the GDP growth.

Mukherjee said the government was committed to maintaining fiscal balance and discipline in spite of high inflation and growth slowdown.

"We are monitoring our resource mobilisation efforts as well as our expenditure. We will not hesitate to take the required corrective measures to remain on the path of fiscal prudence so that the short-to-medium term growth prospects are not undermined," he said.