Economic growth to pick up: Pranab

Finance Minister Pranab Mukherjee on Tuesday exuded confidence that economic growth will gather momentum and inflation would moderate though hovering around 6-7 per cent level for the time being.

Addressing industry captains at CII's annual meet, the minister also stressed the need to be ever ready to deal with any external shocks on real time basis.

"I am confident that we would progress in recovering some of our pre-crisis growth momentum in 2012-13," he said.

Economy which grew at an average rate of 9 per cent before global crisis, slowed to 6.7 per cent in 2008-09.

There was recovery in subsequent two years as the GDP expanded by 8.4 per cent but is estimated to again slow down to 6.9 per cent in 2011-12.

The government expects the GDP growth in 2012-13 at 7.6 per cent.

On the price situation, Mukherjee said sustained high level of inflation had been a cause of worry for policy makers, but it has now started moderating.

However, he expressed concern over spike in food inflation in March and called for bridging the gap between demand and supply.

"I am confident that during the current financial year, the rate of inflation would see some moderation and remain within 6-7 per cent. Though it is high, but for the time being, perhaps, we will have to rest with it," he said

Inflation, which remained high during 2010 and most of 2011, has moderated to 6.89 per cent in March.

Expressing concern over the current phase of slowdown in industrial production he said, "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 added.