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India’s GDP should grow at a rate of 10 per cent in the next financial year

(01/14/2011) .

 

The indian economy should grow between 9 and 10 per cent in the next financial year, that begins in April 1st, after grew 8,5 per cent in the at the current FY. The projection was made this Saturday by the indian prime minister, Manmohan Singh.

Driven by the internal market, the indian economy grew at 8,9% in the third quarter, figure that coincided with the growth revised in the last quarter. The Singh’s prospect is below the anticipation made previously by the government, which was of 9%.

“Despite the context of global uncertainty, I am happy that our economic recovery is progressing very well," Singh said at the annual meeting of foreign nationals living in New Delhi.  “We hope that from next year we will be able to grow between 9% and 10%."

India, the third largest economy in Asia, grew by an average of 9.5% over three years in the financial year ended in March 2008, before it was hit by a global decline that led to deceleration of economic expansion to an index of 6.7% between 2008 and 2009.

Although the economy seems to have stabilized, Singh's government comes under pressure to contain inflation, particularly the rising prices of products. Food inflation in India reached 18.3% during the week of Dec. 25. It was the highest in over a year. In the previous week, the index had been of 14.4%.

Despite the rains out of season being pointed as the guilties for the rising of vegetables like onions and tomatoes, some analysts says that the reasons of the agricultural productive plunge and the problems in the rail system are due to incipient reforms and the lack of governmental investment. 

Limited power of buying

 

Food products have a weight of 14,34% above the wholesale índex, considered as the main inflation index in India, but a raise in the foods price is viewed as something that could feed the inflationary expectations  and to provoke the limitation of the buying power of the consumers.

Singh didn’t pronounced about the inflation, but the Finance Minister, Pranab Mukherjee, that discoursed in the same event as the prime minister, has recognized the need to control it. “We have to take actions to maintain inflation in a moderate level “, said Mukherjee.

The government’s failing to control the inflation and a series of corruption scandals, one of them a suspected scheme of fraud in telecommunications of US$ 39 billion, accusations of corruption along the Commonwealth Games and the ressurgement of a 25 year old scandal linked with a contract in the Defense area are reducing the public opinion support.

A research made by the AC Nielsen Institution in the beginning of the month has showed that the governist Congress Party could lost 40 post offices in the Parliament if the elections would be released tomorrow. The prime minister Singh said that is trying to make the government more transparent. “We are analyzing seriously how to make systemic change and to guarantee more transparent procedures and safeguards in our government’s processes”, said Singh.

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