According to Mr Montek Singh Ahluwalia deputy chairman of Planning Commission, drought may prevent India from achieving 7% growth this year but a reasonable six to six and a half percent economic expansion is more likely given the current scenario.
Mr Ahluwalia said that "7% growth rate this year is unlikely. People are talking about 6% and 6.5% growth which we agree and I think is reasonable.”
Mr Ahluwalia while speaking at a function organized by Federation of Karnataka Chambers of Commerce and Industry chamber said that "The economy should be able to re bounce by 2010. It would be normal in the 12th Plan.”
On tackling the drought situation in the country he said that India is better prepared to manage drought compared to any other period in the past. Food stock is 16 million tonnes higher than 2008 and 30 million tonnes higher than previous two years. He added that "We have been able to manage scarcity well.”
Mr Ahluwalia said that though the drought is expected to impact farmer's incomes, which would have a spillover impact, the government has in place mechanism to offset the degree of impact, including the National Rural Employment Guarantee scheme.
Mr Ahluwalia said the impact of the global recession was not limited to just transmission of the trade channel, but also disruption in the finance sector. Now the situation is stabilizing a bit.
He pointed out that global efforts had been made to bring the economy on an even keel, leading to financial stability coming in relatively quickly in the world, compared to the Great Depression.
(Sourced from http://www.steelguru.com/news/index/2009/09/04/MTEwMDkx/Macroeconomic_indicators_-_Drought_may_prevent_7pct_growth.html)
Thursday, September 3, 2009
Macroeconomic indicators - Drought may prevent 7pct growth
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