India to have U-shape economic recovery in next 2 qtrs
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Last Updated: Friday, August 07, 2009, 19:29
New Delhi: The government today forecast the economy would see a 'U' shaped recovery in the next six months with the stimulus measures sustaining growth.

It said the second half of the current financial year would be better than the first half.

"A 'U' shaped revival of growth path is expected with two not-so-good quarters followed by two good quarters," the minister of state for finance, Namo Narain Meena, told Lok Sabha.

In a written reply, he said, "the steps initiated by the government for sustaining growth momentum include short-term measures of fiscal stimulus packages by enhancing expenditure levels and duty reductions."

He cited the Economic Survey 2008-09 as saying the real gross domestic product (GDP) at factor cost is expected to grow at around 7 plus/minus 0.75 per cent in the fiscal 2009-10, assuming a normal monsoon.

The minister said the government had decided to raise a higher proportion of budgeted borrowings in the first half of the fiscal to minimise the negative impact of the borrowings on the financial market.

"As the demand for credit by the commercial sector is expected to gather momentum in the second half of the current financial year with expected revival of the economy, the market borrowings of the government have been frontloaded to ensure that the borrowing programme is undertaken in a non-disruptive manner," he said.

Accordingly, for the first half (April-September 2009), market borrowing programme for Rs 2,99,000 crore, constituting about 66 per cent of the gross borrowings for the fiscal, have been announced.

Bureau Report

First Published: Friday, August 07, 2009, 19:29

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