NEW DELHI: There are, however, some "pressure points" on the economy that might put roadblocks in the way of achieving sharply higher economic growth, he noted. "The economy is on a growth path and that is in conformity with the budget projections," said Singh, while presenting a quarterly review on the economy to Parliament. "The monsoon has so far progressed well with 86 percent of the metrological subdivisions receiving adequate rainfall by July 23. Latest forecasts predict 98 percent of the long-period average rainfall," he said. "This should reverse the decline in agriculture output of last year, leading to robust growth in this sector." The agriculture sector, which depends heavily on the monsoon rains, accounts for a quarter of India's total output and employs more than two-thirds of its billion-plus people. Metrological department officials say the June-September monsoon is expected to be close to normal this year after below normal rains last year, when the country faced the worst drought in three decades. Buoyed by normal rainfall, economic think tanks have started revising projections for economic growth in the current fiscal to 6 and 6.5 percent, up from previous forecasts of between 5 and 5.5 percent. "This year should witness significant growth enhancement coupled with macro-economic stability," said Singh. All major macro-economy parameters like inflation, exports, foreign exchange reserves, stock market movement and tax collections too point towards higher economic growth in fiscal 2003-04. "Rates of interest have remained modest and have provided enhanced opportunities for investment in core sectors like housing, cement and steel," Singh said. "A marked reduction in the lending rate for agriculture to nine percent per year for loans up to 50,000 will provide a much needed impetus." Singh, however, cautioned the government subsidies on food and some petroleum products might put pressure on the economy in the months ahead. "Subsidies have registered a high growth of 62 percent in the first quarter relative to the same period last year," said the finance minister. "This high growth in subsidies contains a large outgo of 16.80 billion on account of budgetary subsidies on kerosene for the public distribution system and liquid petroleum gas as well as food and fertiliser subsidies."
Source: IANS