New Delhi: A robust domestic demand will be key to withstanding the shocks and uncertainties that come with a global economy, Finance Minister Pranab Mukherjee said on Friday.
"We have to deepen and broaden the domestic market, so that we can ride the shocks and uncertainties of the global economy just as well as the periods of expansion and boom," Mukherjee said at the 88th Annual Function of Assocham here.
"This requires that we take a balanced, broad-based approach to our development process, an approach that is well captured by the idea of garland of grids," he said.
Steps have to be taken to allow the economy to develop spatially and synergistically across different sectors to ensure that overall sustainability of the growth process and a quality of life that the `Aam Aadmi` aspires for.
Speaking on the health of the economy, the Finance Minister said the Gross Domestic Product has grown at 8.5 percent in the past few year, although there was a significant dip in the rate in 2008-09, owing to the global meltdown.
But even then, the country has succeeded in significantly raising the growth rate and sustaining the momentum of the economy, he said, adding, savings and investment rates have picked up.
The industrial sector has shown the capacity to compete with the best in the world and there is a steady expansion of the domestic demand, the minister said.
"Most importantly, the revenue buoyancy in the wake of this growth has come with a renewed public capacity to address the chronic problems of unemployment and poverty that have plagued our economy and the society," he said.
Speaking about the challenges and the opportunities of development in a globalised era, Mukherjee said, sustaining high growth over an extended period has become more complex.
The last two years have been difficult for the Indian economy, which was otherwise experiencing an unprecedented spurt in growth.
Mukherjee also said that the proposed direct tax law would be implemented in 2011.