Finance Minister, Mr. Pranab Mukherjee reaffirmed the GDP growth expectations at 7.75-8% for next year, on Wednesday, December 23, 2009. The FM’s enthusiasm was shared by the major investment banks with Macquarie and Nomura projecting 8%, while JP Morgan estimating 7.8% GDP growth rate the full fiscal 2009-10.
At the 104th annual session of the PHD Chamber of Commerce and Industry, Mukherjee stated in clear terms that the encouraging growth in the last two quarters are indicative of better-than-expected pace of economic recovery in India and the growth targets of 9-10% are achievable in a couple of years. The Finance Minister’s remarks were well received by the stock markets, causing BSE’s SENSEX to jump by 3.23% on Wednesday.
Mukherjee further mentioned that the Government is contemplating the manner and the extent of the withdrawal of the financial stimulus for economic recovery. The policy changes will be incorporated in Budget 2010-11. The Government has extended three major bailout packages since the fall of the Lehman Brothers at the Wall Street. However, the Finance Minister remarked that the direct impact of the current monetary policy on the economy remains uncertain. Expressing concern over the rising food-inflation, he indicated a possible CRR-hike to prevent wage increase and spiraling prices of the industrial produce.
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