India targets ‘earliest’ return to 9.0 percent growth

NEW DELHI, July 6, 2009 (AFP) – India’s finance minister targeted a return to 9.0 percent economic growth “at the earliest” in a budget speech Monday that suggested the country had seen off the worst of the global financial crisis. But in announcing increased funding for farmers and poverty alleviation programmes, Pranab Mukherjee also warned that India’s soaring fiscal deficit would continue to grow in 2009-10 to 6.8 percent of GDP.

The estimate was far higher than the 5.5 percent put forward by the government in an interim, pre-election budget in February.

The deficit had ballooned to 6.2 percent in the year to March 2009 — more than double the government’s target of 2.5 percent and the highest in nearly two decades.

“The first challenge is to lead the economy back to the high growth rate of 9.0 percent per annum at the earliest,” Mukherjee told parliament as he presented the 2009-10 budget.

“The second challenge is to deepen and broaden the agenda for inclusive development,” he said.

India’s economy grew by 6.7 percent in the year ended March 31 — the slowest rate since 2003 and down from nine percent a year earlier, as the effects of the global economic downturn hit home.

In its annual