Finance Minister Pranab Pranab on Wednesday exuded confidence that the economy will surpass the International Monetary Fund projections of 8.8 per cent in 2010 and 8.4 per cent the next year, but admitted the benefits of faster economic expansion is yet to percolate down to the poor.
"The IMF in its latest world economic outlook has projected that GDP growth to be 8.8 per cent in 2010, and 8.4 per cent in 2011, and I expect even better performance," Pranab told a Confederation Of Indian Industry annual session in the Capital.
For the 2009-10 fiscal, Pranab said, he expects the economy to grow by 7.2 per cent, the same as estimated by the Central Statistical Organisation in its advance estimate. The final GDP numbers for FY10 will be released on Friday.
"This achievement is particularly significant, considering that we had an unfavourable monsoon, which dampened the growth of the farm sector. I expect strong growth in the current fiscal that stands to benefit from further improvement in business confidence," Pranab added.
Planning Commission deputy chairman Montek Singh Ahluwalia also said he does not think that 7.2 per cent growth projection would have to revised downward. According to data released today, industrial growth stood at 10.4 per cent during 2009-10, which analysts say will ensure 7.2 per cent growth.
But Pranab admitted that the fruits of high economic growth are yet to reach the poor. "In the post-liberalisation phase, the government realised that despite consistently achieving high level of economic growth, the benefits do not percolate (down) to the bottom layer of the masses," he said.
The finance minister also admitted that irrespective of the recent debate on the number of persons below the poverty line, it is a fact that a significant chunk of our population has yet to benefit from the growth story.
"We know the fact that approach to poverty reduction is necessary, but not a sufficient condition to eradicate poverty and derivation. It is a complex process and need multi-pronged efforts," he said.
According to the parameters used by the Suresh Tendulkar committee report, over 37 per cent of the population are poor, which is a whopping 10 per cent more than the Planning Commission's estimates in 2004-05.
At a separate function organised by economic think-tank Icrier, IMF's director at the Asia and Pacific department Anoop Singh said, "China and India will again lead Asia's growth, with 10 and 8.8 per cent in 2010, respectively."
The GDP growth slowed down to 6.7 per cent in 2008-09 after hit by the global financial meltdown. Stimulus packages provided by the government in the form of cut in taxes and step up in public expenditure pushed economic growth to an estimated 7.2 per cent during 2009-10.
