New Delhi, March 3 (IANS) Finance Minister Pranab Mukherjee Wednesday said that economic growth would pick up in the last quarter of this fiscal and the dip in the third quarter was because of the steep fall in agricultural output.
‘The third quarter growth rate of 6 percent reflects the sharp decline in agricultural growth rate due to drought and negative rate of government spending,’ Mukherjee said at a function of the national council of the Confederation of Indian Industry (CII).
‘I do expect that in the fourth quarter the GDP will pick up again,’ he said.
According to the government’s advance estimates, gross domestic product will climb to 7.2 percent during the current fiscal, from 6.7 percent in 2008-09.
Mukherjee said the recovery in the economy was being led by the manufacturing sector and a rabbi crop that is expected to do far better than the khariff crop.
Speaking to industry leaders, here, at a post budget conference, the minister said that his budget sought to tread the fine path of managing fiscal deficit without compromising on economic growth.
‘Recovery continues to be driven by government stimulus spending, and is not completely broad based. Therefore, I have placed growth at the centre of the budget,’ said Mukherjee.
The minister said many of the duty hikes he had announced in the budget did not constitute a hike per se, as he had just cut down on the stimulus package.
‘The roll back of stimulus has been only partly carried out in the matter of excise duties by two percent, which is still lower than pre-stimulus rates.’
He, however, added that the roll back was not done for sectors which were still under distress due to the global financial crisis.
‘I have been careful to retain the interest rate subvention given to exporters for the coming year, to increase subvention provided for farmers, and to maintain peak customs duty and service tax at current rates.’