India pegs lower economic growth at six percent

Monday, 13 December 2004, 20:30 IST
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NEW DELHI: India lowered its economic growth projection for the current fiscal year to six percent from the earlier level of 6-6.5 percent, but said the country would continue to be among the world's fastest growing economies. A mid-year review of economy, tabled in both houses of parliament by Finance Minister P. Chidambaram, said less than normal monsoon rains this year had dampened expectations of a higher farm sector growth. It, however, added that the robust performance of the manufacturing and services sectors should keep the overall growth rate healthy, albeit at a level lower than what had been predicted earlier. "Even at a relatively lower growth rate of six percent plus for the current year, India will continue to be one of the fastest growing economies of the world," the 55-page document said. The document also cast a shadow on inflation and said pressures on the price line had continued to cause worry and blamed it on the unprecedented rise in global crude oil prices since the beginning of this year. It said crude prices posed a threat to price stability and structural reform of the petroleum sector and emphasised on the need to carry forward the process of fiscal consolidation and reforms in the present subsidy regime. "The report aimed at targeting subsidies to the truly poor and needy is being finalised. This was a commitment under the National Common Minimum Programme (NCMP)," it said. The document also underlined the commitment of the government to bring down tariff to levels prevailing in member-countries of the Association of South-East Asian Nations and also stressed on the need to carry forward major tax reforms. According to the review, the NCMP had also required streamlining of the tax system and widening of the base and said the introduction of value-added tax system from April 1 next year would remove distortions in indirect tax system.
Source: IANS
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