Pranab lowers 2011-12 growth projection to 7.5 percent

After a slump in growth in the first two quarters of the current financial year, Finance Minister Pranab Mukherjee Friday lowered the economic growth projection to around 7.5 percent for 2011-12 from his budgetary estimate of 9 percent

"I am modest, I am not saying that I will be reaching the figure which I projected earlier during the budget -- 9 percent plus minus 0.25 percent. I am reducing it at around 7.5 percent," Mukherjee said at the Hindustan Times Leadership Summit here.

India's economic growth has slumped to 7.3 percent in the first half of the current fiscal, substantially below the budgetary estimate. The gross domestic product (GDP) growth declined to 7.7 percent in the first quarter and it slumped further to 6.9 percent in July-September period.

The finance minister said the government was not in a position to boost growth through stimulus as it did during the global financial crisis in 2008-09.

"I am not in a position to provide that level of fiscal stimulus that we provided in 2008-09. But certain policy changes can improve the situation little bit which we are doing," he said.

Mukherjee expressed hope that the government would be able to make national consensus on key economic reforms, which are crucially important to boost the economic growth.

The finance minister said stimulus packages helped the Indian economy recover from the global financial mess in 2008-09.

"At that time, through three stimulus packages we could generate domestic demand and provide some support to industrial sector through which the process of deceleration was checked dramatically and we ended the year with a growth of 6.8 percent in 2008-09," said Mukherjee.

He also said the projection of around 9 percent growth for the current financial year was based on the kind of recovery and resilience the Indian economy showed in 2008-09 and in the subsequent years.