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Posted on Nov 14, 10:22PM | IANS
The recent reform measures like liberalisation of overseas investment norms in retail and aviation sectors and reduction in petroleum subsidies will help cut fiscal deficit and boost economic growth, President Pranab Mukherjee said Wednesday.
Inaugurating the 32nd edition of the India International Trade Fair (IITF) here, Mukherjee said the government has unveiled several policy measures designed to put the economy back on a high growth trajectory.
"Important among these have been the decisions to allow foreign direct investment in multi-brand retail and the civil aviation sector and seek legislative approval for increasing the FDI cap in the insurance and pension sectors," he said.
"Simultaneously, measures have also been announced to keep government's subsidy burden in check thereby bringing about a reduction in the fiscal deficit. These measures should help in restoring the economy's growth momentum."
India's economic growth is estimated to decline to nearly a decade's low in the current financial year, largely due to global uncertainties and domestic policy inaction, often termed as "policy paralysis".
The country's gross domestic product (GDP) growth fell to nine year low of 5.3 percent in January-March 2012 quarter. It improved marginally to 5.5 percent in the quarter ended June, but remained much below the average annual growth of 8.2 percent recorded in the past eight years.
Mukherjee said India has diversified its economic engagements with a view to lower the impact of uncertainties in some part of the world, especially in the developed countries like the US and Europe.
He pointed out that India's foreign trade as a proportion of the country's GDP has more than doubled in the last 10 years. The proportion of foreign trade to the country's GDP increased to 45 percent in 2011-12 from less than 20 percent in 2000. India's export has increased five times in the last one decade.
The compound annual growth rate of India's exports, which was 8.2 percent in the 1990s, increased to 19.5 percent during 2000-01 to 2008-09.
"India's share in global exports also increased from 0.7 percent in 2000 to 1.5 percent in 2010. Its ranking in the leading exporters improved from 31 in 2000 to 20 in 2010," Mukherjee said.
"India has also achieved considerable diversification in its export basket and its export destinations, with countries in Asia and Africa gaining ground relatively over USA and Europe," he said.