Kolkata: Finance Minister Pranab Mukherjee
today said the economy would expand by 7.75 per cent during
the current financial year despite the adverse impact of
drought and floods on agriculture.
"In case of negative growth in agriculture due to bad
monsoon and floods, it will be adequately compensated by
manufacturing and services sectors in the third quarter
(October-December)," he said after inaugurating the Industrial
Trade Fair here.
Following drought and floods, agriculture and allied
sector growth rate declined to 0.9 per cent in the second
quarter (July-September) from 2.7 per cent during the
corresponding period last year.
However, despite poor showing by the farm sector, the
economy in the second quarter grew by 7.9 per cent, more than
anticipated by analysts or think tanks. The upbeat growth in
the second quarter is significant in the back drop of 2008-09
growth of 6.7 per cent, down from 9 per cent in the previous
Referring to rising government borrowings in the current
fiscal, Mukherjee said, there was enough liquidity in the
system and the private sector would not suffer from credit
"Inflows from external sources like FIIs and FDI are
increasing. These factors generate confidence and unless any
untoward incident takes place GDP growth will be 7.75 per
cent," Mukherjee said.
First Published: Thursday, December 24, 2009, 20:58