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Global problems, high interest rates pulling down growth: govt

Press Trust of India  |  New Delhi 

Attributing the slowdown to the Reserve Bank's tight monetary policy and global problems, the government today informed Parliament that economic growth in 2011-12 will moderate to 7.5%, from 8.5% in the previous fiscal.

"The slower-than-expected growth this year could be attributed to global slowdown, which has resulted in slowing down of growth rate in many countries, including India, as well as to tight monetary policy to control inflation," Minister of State for Finance Namo Narain Meena said in a written reply in the Rajya Sabha.

Although the Economic Survey in February had expected a growth rate of 9% for the current fiscal, the Mid-Year Analysis 2011-12 tabled in Parliament recently lowered the growth projection to 7.5%, he said.

"While the economy is expected to slow down in the current year from the levels achieved in 2010-11, India is still among the global frontrunners in terms of growth of Gross Domestic Product ," Meena said.

The government has been pursuing prudent macroeconomic policies on a ongoing basis to obviate the impact of global financial crisis, he said, adding that the efforts were also being made to strengthen financial markets and increase social spending to protect poor.

The specific measures taken by the government recently to promote growth include "creation of  Infrastructure Debt Fund, focusing on Public Private Partnerships, announcement of New Manufacturing Policy, announcement of Draft Telecom Policy, introduction of Land Acquisition Bill in Parliament, and a number of legislative measures to develop banking sector in India", he added.

First Published: Tue, December 20 2011. 14:28 IST