India committed to reforms, potential to grow at 9 pc: Finance Minister Pranab Mukherjee

LONDON: Expressing the government's commitment to deepening reforms and liberalising norms for foreign investment in retail and defence, Finance Minister Pranab Mukherjee on Monday said that India has the potential to clock 9 per cent growth rate though inflation is a concern.

"We are in the process of deepening policy reforms in the financial sector ... discussions are under way to build consensus on further liberalisation of the FDI policy in retail and defence sectors," he said.

Addressing the fourth ministerial-level India-UK Economic and Financial Dialogue here, he added India recorded 8.5 per cent growth rate in 2010-11 despite global slowdown impacting the world economy.

"We have recorded one of the fastest growth rates in the world and are nearly back to our pre-crisis growth levels. We believe that growth potential of India is over 9 per cent," the Minister said.

He, however, said there were downside risks emanating from continuity uncertainty about energy and commodity prices which have implications for meeting "fiscal deficit targets, moderating domestic inflation and improving investment sentiments in the economy."

Elaborating on inflation, Mukherjee said, "while there has been some progress in containing domestic inflation, it continues to be an area of concern. Supply side and monetary measures are being actively taken to address it".