New Delhi: Fresh data released on Thursday showed the country’s industrial output declined in December, but two key cabinet members said the country's economy would register a fast growth of around 7 percent.
"I am proud to say that in 2008-09 India will still grow by 7 percent," said External Affairs Minister Pranab Mukherjee while addressing the 81st annual general meeting of the Federation of Indian Chambers of Commerce and Industry (FICCI).
He also referred to the latest growth projections of the International Monetary Fund (IMF) that said advanced economies would shrink by 2 percent.
At another function, Commerce Minister Kamal Nath echoed Mukherjee. Referring to the slowdown in the US and Europe, he asserted: "But we will be able to maintain a GDP growth at 7 percent."
Maintaining that the country would remain one of the fastest growing over the next few years, Kamal Nath said India, Brazil, Russia and China as well as GCC economies, would contribute about 35 to 37 percent of incremental global GDP growth till 2012.
"We are certainly more integrated to the world economy today. The ratio of total external transactions (gross current account flows plus gross capital flows) to GDP has increased from 46.8 per cent in 1997-98 to 117.4 per cent in 2007-08. These numbers are clear evidence of India's increasing integration into the world economy," the minister said.
He also asserted India was in a better position than most economies to attract pools of global capital like sovereign wealth funds, long-term insurance and pension assets and infrastructure funds.
Reality by numbers
Despite the assertions of the two high-profile ministers, data released on Thursday showed after a marginal recovery in November, India's industrial production fell 2 percent the next month with no signs of abatement in the impact of the global meltdown on the country's economy.
Data also showed that the index for manufacturing, that has the maximum weight, fell 2.5 percent, versus 8.6 percent in the like month of previous fiscal.
The general index had expanded 8 percent in December last fiscal, said the statistics released by the Central Statistical Organisation (CSO). The organisation also revised downward industrial growth for November to 1.7 percent from the estimated 2.4 percent earlier.
Mukherjee, who is also handling the finance portfolio while Prime Minister Manmohan Singh recuperates from his heart bypass surgery, seemed to have an explanation for this.
"India faces a special challenge from the international financial crisis. In a globalised economy while India cannot be immune to the impact of the crisis, we have to address this on many fronts," he said.
Maintaining that the government would be looking at several avenues to spur growth, Mukherjee said: "There is a need to sustain our foreign trade, revive foreign investment and generate domestic demand in order to maintain our growth rate which are essential to the uplift of the multitudes below poverty line."
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