FM Inaugurates 82nd AGM of FICCI

NEW DELHI, February 27, 2010. The Finance Minister, Mr. Pranab Mukherjee, today declared the government's commitment to fiscal consolidation to boost the economy's capacity to sustain a double digit growth in the medium and long term. This could be achieved through a robust recovery in private investment and consumption demand, he said, urging Industry to respond to the challenge.

Inaugurating the 82nd Annual General Meeting of FICCI, Mr. Mukerjee, in his first public statement after presenting the Union Budget 2010-11 in Parliament on Friday, said, "I am committed to fiscal consolidation in the interest of the economy's capacity to sustain growth in the medium and long term. This can be fully effected only when the recovery in private demand, both consumption and investment, is sufficiently robust."

Expressing the government's continued concern at the persistence in the momentum in food prices, with double digit food inflation, the Finance Minister said that a significant part of this could be explained by supply-side bottlenecks in some of the essential commodities, precipitated by the delayed and sub-normal south-west monsoons.

Mr. Mukherjee called for a re-look at the country's export strategy by diversifying the markets in the backdrop of concerns over the extent to which the export recovery seen in November and December 2009 could be sustained in the coming months, given the uncertain recovery in the developed economies.

The Finance Minister said, "We need to pursue the factors underpinning the recent spurt in growth in order to quickly regain the momentum that slipped in the past year and build on it in the coming years. He drew satisfaction from the fact that the fundamentals of the economy were strong. The positives from our recent performance outweigh the negatives, so that one can hope to see the economy breaking the double-digit growth barrier in the very near future."

His optimism stems from the revival of investment and private consumption demand, impressive growth in exports in November and December 2009, the revival of industrial growth, the turnaround in infrastructure services since the second quarter of 2009-10 and the favorable capital market conditions with improvement in capital flows and business sentiment.

Source : Equity Bulls

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