Economy to expand faster; uncertainties on horizon, says PM

New Delhi, June 1 (PTI) Prime Minister Manmohan Singh
Tuesday said the Indian economy is expected to grow by 8.5 per
cent this fiscal, but sounded caution on global developments
saying there are "uncertainties on the horizon."
In his remarks on the first anniversary of the United
Progressive Alliance-II government, he, however, said he was
cautiously optimistic about the year ahead.
Without mentioning the threat to growth from the European
sovereign debt crisis, Singh said: "This (India's growth) is
one of the best performances in the world... There are
uncertainties on the horizon, but on the whole I look to the
year ahead with cautious optimism."
India recorded 7.4 per cent growth in 2009-10, which was
more than the 7.2 per cent projected earlier. Economic growth
had slipped to 6.7 per cent in 2008-09, after four straight
years of average 9 per cent expansion.
Concerned over inflation, which breached double digit
level (10.6 per cent) in February, the Prime Minister said the
government would monitor the situation and "take whatever
corrective steps are necessary to rein in" prices.
Although he sounded cautious on the developing crisis in
Europe, triggered by Greece's sovereign debt crisis and bank
failures in Spain, the Prime Minister said India must withdraw
fiscal stimulus to boost economic growth and reduce deficit in
a calibrated manner.
The government resorted to fiscal stimuli to deal with
the fallout of global slowdown. "It has worked well, but now
we must return to the path of fiscal prudence."
The country's fiscal deficit is estimated at 5.5 per cent
of GDP this fiscal, but may come down on higher than expected
revenues (nearly Rs one lakh crore) from sale of 3G telecom
and broadband wireless licences.
In the Budget for 2010-11, the government increased
excise duties and duties on fuel as a part of withdrawal of
stimulus unveiled in the wake of the 2008 global crisis. PTI