The first citizen of the nation, too, is feeling the heat of price rise and slower growth. However, President Pranab Mukherjee is optimistic on both fronts.
Addressing the joint sitting of the two Houses of Parliament for the first time, Mukherjee said, “Inflation is easing gradually, but is still a problem.” However, he did mention that in recent months, there had been positive developments, too, with the moderation in core inflation. For January, the headline inflation, Wholesale Price Index (WPI) came down to 6.62 per cent, which is a three-year low.
Expressing concern over declining growth, the President said, “Both global and domestic factors have affected our growth. We need to address the impact of both. My Government has responded to the situation by taking several measures to revive investment activity and investor sentiment.”
The GDP growth for 2012-13 is estimated to fall to a decade low of five per cent from 6.2 per cent in 2011-12.
Referring to the eight per cent average annual growth target for the 12th Plan, the President said, “The 12th Plan recognises that growth outcomes will depend upon the extent to which we are able to take some difficult decisions.” He admitted that the past year had been a very difficult one for the entire global economy.
“Europe is in recession. Most emerging markets are growing very slowly. It has been a difficult year for India also. Both global and domestic factors have affected our growth. We need to address the impact of both,” he added.
On concerns over fiscal prudence, Mukherjee said the Government had announced a roadmap for fiscal consolidation and would contain the fiscal deficit to 5.3 per cent of the GDP in the current financial year. As a part of the roadmap, the Government intends to bring the fiscal deficit to 4.8 per cent in 2013-14, before capping it at three per cent by 2016-17.
Record foodgrain output
Mukherjee further said that relentless efforts of farmers, supported by Government policies, had resulted in record foodgrain production for two consecutive years, with the last year achieving a peak of 260 million tonnes. This year, he said, despite erratic and deficient rainfall, it is projected that India will produce more than 250 million tonne of foodgrains.
He said the recently approved New Investment Policy for urea was expected to create nearly 100 lakh million tonne of additional production capacity in urea by 2017, making the country self-reliant in the product.
Pointing out that lack of adequate and quality infrastructure was a major hurdle to growth, he said, it was imperative that the infrastructure deficit was “overcome and adequate investment takes place”.
The President said the Government remained committed to increasing the share of manufacturing sector to 25 per cent of GDP and creating 100 million jobs within a decade.
Referring to the recent rollout of Direct Benefits Transfer system, he said it would enable Government-sponsored benefits, such as scholarships, pensions and maternity benefits, to flow directly into the accounts of beneficiaries.
“In due course, the Direct Benefits Transfer system will also cover wages and subsidies on food and LPG. This system will help cut down leakages, bring millions of people into the financial system and lead to better targeting of beneficiaries,” he added.