Mukherjee underlines need to monitor emerging trends in inflation

NEW DELHI - Recognizing the fact that inflation continues to be high even though it has come down markedly from where it was at the start of the fiscal year, Union Finance Minister Pranab Mukherjee today underlined the need to monitor emerging trends in inflation on a sequential monthly basis.

Presenting the economic survey in Lok Sabha, Mukherjee said: “He observed that a rise in savings and investments and pick up in private consumption has resulted in 9.7 per cent growth of GDP at market prices (constant) in 2010-11.Savings rate has gone up to 33.7 percent while the investment rate is up to 36.5 percent of GDP in 2009-10.

In order to check food inflation, the economic survey has suggested, the Government should improve the delivery mechanisms by strengthening the institutions and addressing corruption.

The survey has pointed out that the inflation is expected to be 1.5 percent higher than what would be if the country was not on the growth curve.

The survey reports that the industrial output growth rate was 8.6 per cent while the manufacturing sector registered a growth rate of 9.1 per cent in 2010-11.

“During April-November 2010 telecom, crude oil production, civil aviation sectors performed well while the power generation, cement and fertilizer production, railway freight traffic and cargo handling at major ports have grown at comparatively lower rates. Six core industries registered a growth of 5.3 per cent (provisional) in April-December, 2010 as against 4.7 per cent during the same period in 2009-10,” it added.

Lauding the role of services sector as the potential growth engine, the survey has called for the policies to promote further opportunities in new areas in global demand such as accounting, legal, tourism, education, financial and other services beyond the IT and business process sectors.

The economic survey has lauded the Government’s efforts in addressing social and financial inclusion.

The survey has also made specific mention of Government’s active engagement on issues related to climate change with expanded financing of programs and better policies.

The economic survey has suggested that in the long run the potential engines of growth for the country could be from skill development and innovative activity and therefore, efforts should be made to promote them.

Regarding the outlook for the Indian economy, the survey said that despite the risks of global events, such as volatility in commodity prices like crude oil exacerbated by political turmoil in the Middle-East, the Indian economy seems poised to scale greater heights in terms of macro economic indicators.

The survey sums up by stating that the real GDP growth is expected to reach the 9 per cent mark in 2011-12 and the next two decades may well see the economy growing faster than it has done any time in the past. (ANI)