The Finance Minister Shri Pranab Mukherjee said that despite continuing global economic crisis, India will be able to achieve growth rate of more than 8.5% during the current financial year i.e., 2010-11. He said that he endorses the prediction made by International Monetary Fund that India will achieve a growth rate of 8.8% during the current financial year. The Finance Minister was addressing a gathering of senior executives from financial services firms at the Institute of International Finance in Washington yesterday evening. Shri Mukherjee said that there are three challenges before the Indian economy today. First is to come back on the path of fiscal consolidation and bring down the fiscal deficit to 5.5% in the current year and 4.1% in the next financial year. Second challenge before us is to contain the rate of inflation which has reached almost double digit i.e., 9.9% compared to 2.1% in the previous year. He said that this is mainly due to constraints in supply side of food articles which include cereals, pulses, edible oils and sugar among others. He added that inflation in food articles was more than 17% for a long time which will start declining after the middle of July 2010 as the monsoon is expected to be normal this year. Third challenge before the Indian economy is to contain the oil prices as we have to import more than 70% of our demand from outside.

Speaking on the occasion, the Finance Minister also said that the flow of foreign direct investment in the country has not been disturbed because of the strong fundamentals of Indian economy despite worldwide financial crisis. At the end, the Finance Minister said that during the last G-20 Finance Ministers’ meeting in Busan, South Korea, early this month, India took a stand that process of fiscal consolidation should be country specific and staggered and should not be enforced in one go in all the countries. Besides, India took a stand that there is no need for funding banks from Government exchequer through bank levy etc. rather banking regulation mechanism and institutional framework be put in place to avoid any bank levy etc. He said that both the suggestions were well taken by the member countries.

On this occasion, Indian Ambassador in US, Ms. Meera Shankar and Mr. Charles Dallara, Managing Director, Institute of International Finance also spoke. The Finance Minister also welcomed the interest taken by Institute of international Finance which will hold its next annual conference in India this year.