Attributing slow growth to global and domestic factors, President Pranab Mukherjee on Thursday said the government is taking several steps to boost economy and restore investor confidence.
New Delhi: Attributing slow growth to global and domestic factors, President Pranab Mukherjee on Thursday said the government is taking several steps to boost economy and restore investor confidence.
"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," he said in his maiden address to the joint sitting of Parliament, which heralds the Budget session.
Mukherjee further said: "The past year has been a very difficult one for the global economy ...It has been a difficult year for India also.
"The Indian economy is currently experiencing slower growth. The real GDP grew by 5.4 per cent in the first half of the current fiscal year. This is significantly lower than the average of around 8 per cent in the last decade."
The growth in 2012-13 is expected to fall to a decade low level of 5 per cent against 6.2 per cent in 2011-12.
Finance Minister P Chidambaram is scheduled to unveil budget proposals for 2013-14 on February 28 which among other things would seek to arrest industrial growth and boost economy.
On concerns over fiscal prudence, Mukherjee said, the government has announced a roadmap for fiscal consolidation and would contain the fiscal deficit at 5.3 per cent of the GDP in the current financial year.
Chidambaram had already indicated that he would endeavour to bring down the fiscal deficit to 4.8 per cent of the GDP In 2013-14.
The government, the President said, is also planning to push the Food Security Bill, which seeks to provide subsidised foodgrains to poor as a matter of legal right.
Referring to the issue of price rise, Mukherjee said "inflation is easing gradually, it is still a problem ... There has been a moderation in core inflation and recovery in growth is likely".
The inflation based on Wholesale Price Index (WPI) plummeted to a three year low of 6.62 per cent in January. The retail inflation, however continued to remain in double digit.
The government, he added, is also working with states to reach a consensus on Goods and Services Tax (GST), which will streamline indirect taxation system.
With record foodgrain production for two consecutive years, he said, India's foodgrains position is comfortable. The total stock of foodgrains with the public sector agencies was 662 lakh tonnes on February 1, 2013.
Pointing out that lack of adequate and quality infrastructure is a major hurdle for fast growth, he said, it is imperative that the infrastructure deficit is "overcome and adequate investment takes place".
The President also said the government remains committed to increasing the share of manufacturing sector to 25 per cent of GDP and creating 100 million jobs within a decade.
He further said the recent rollout of Direct Benefits Transfer system would enable government sponsored benefits such as scholarships, pensions and maternity benefits to flow directly into the accounts of beneficiaries.
In due course, he said, the 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," Mukherjee said.
However, the President said, the Direct Benefits Transfer system will not be a substitute for public services and will be complementary to the Public Distribution System.