Falling crude prices, normal monsoon to help economy: Pranab

"A normal south west monsoon has been predicted for 2012-13 and there has been a rapid decline in international oil prices in recent weeks...All these factors should help in the recovery of domestic growth momentum," he said said while highlighting "positives" of Indian economy at the annual conference of CBEC.

The interest rate cycle has been reversed by the RBI and mining sector growth has turned around. Further, there has been progress in fuel linkage for power projects and improvement in investment growth rate, he emphasised.

There were no "major adverse results" on corporate performance in the last quarter of 2011-12, he added.

The Finance Minister, however admitted, that government does not have headroom for proactive fiscal policy.

"Like for most parts of the world, the second round of global uncertainty and the slowdown has come rather quickly on the heels of the previous one, with practically no headroom for running a proactive fiscal policy," he said.

Indian economy registered healthy growth of 8.4 per cent in 2009-10 and 2010-11, but renewed global uncertainty, emanating mostly from Euro zone area affected domestic business sentiment in 2011-12.

A tight monetary policy directed at taming inflationary pressures in the economy also came in the way of consolidating economic recovery.

GDP growth in 2011-12 has slowed significantly to just 6.5 per cent and this has been "disappointing", Mukherjee said. (MORE)