March inflation to be 6-7%, growth over 7%: Pranab Mukherjee

Finance Minister Pranab Mukherjee today said the economy may expand by over 7 per cent in 2011-12 and inflation could ease to 6-7 per cent by March-end, even as economists urged the government to adopt fiscal discipline and push policy reforms for higher growth.

"We are hopeful that by the end of March, the headline inflation would be between 6 and 7 per cent while the growth rate may be around 7 per cent plus," Mukherjee told a group of eminent economists at the pre-Budget meeting.

The Finance Minister, who would present the Union Budget in the middle of March, discussed the challenges faced by the economy on both global and domestic fronts.

"The current year was a challenging year as we had to face the problem of inflation, fiscal deficit and maintenance of sustainable and inclusive growth," he said.

Due to volatility of international crude prices, euro zone crisis and overall slowdown in the growth process in developed countries, the emerging economies including India had also to face the adverse impact of global slowdown.

After the meeting, Ficci Secretary General Rajiv Kumar said the economists urged the Finance Minister to present a Budget signalling fiscal consolidation and policy reforms.

The economists also expressed concern over the widening fiscal deficit, which had crossed 92 per cent of the Budget target by December.

"Budget has to make a strong policy statement. Show the world that government is serious on fiscal consolidation and fiscal deficit will be reduced," Kumar told reporters.

The headline inflation, which was near double digit for almost two years, has started showing signs of moderation and declined to 7.47 per cent in December.

In the first half of the current fiscal, the economy grew by 7.3 per cent amid adverse global and domestic factors. Last year, the GDP stood at 8.4 per cent.