Union Finance Minister, Shri Pranab Mukherjee said that the Government has taken several fiscal and administrative measures to contain the price rise and continues to be vigilant on the price front. He said that silver lining is that inflation in food item has declined to single digit i.e., 9.97% in October, 2010. He said that with normal rainfall, the kharif production is now expected to rise by over 10% year on year for food grains and even higher for cash crops such as cotton and sugarcane. The Finance Minister was addressing the Sixth Meeting of the Parliamentary Consultative Committee attached to the Ministry of Finance, here yesterday. The subject matter of the meeting was'State of Economy'. 

The Finance Minister Shri Mukherjee said that the Indian economy has done well in recovering its growth momentum from the impact of the global financial crisis over the last 18 months. He said that our economy registered an annual average growth in Gross Domestic Product (GDP) of 9.5 per cent in the three year period from 2005-06 to 2007-08. The global economic slowdown lowered our growth rate to 6.7 per cent in 2008-09, the Minister added. Shri Mukherjee said that growth recovered in 2009-10 to 7.4 per cent and has touched 8.9 per cent during the first half of 2010-11. He said that the recovery has been broad based with agriculture, industry, manufacturing and services, all contributing to the consolidation of the growth. He further added that more importantly, the economy has become remarkably resilient to both external and domestic shocks. It not only recovered rapidly from the global economic downturn and other external shocks, but also took the monsoon failure last year in its stride and is now showing robust growth, the Minister said. 

The Finance Minister Shri Mukherjee said that there is a need to improve the public distribution system so that people below poverty line get the food grains at nominal price i.e., wheat at Rs.2 per Kg. and Rice at Rs.3 per Kg. (upto 35 Kg.) He said that different sectors should project their demand correctly so that there is optimal utilization of available resources. The Minister said that thought the economy is on a path of higher growth yet there are certain areas of concern. He specifically mentioned in this regard about trade imbalance, volatility of FIIs, current account deficit, reduction in FDI inflows to almost half in last six months and above all, crisis in Euro zone affecting our trade balance. The Minister said that there is an urgent need to make more investment in research and development and innovation both by industry and the Government and for development of skilled manpower to sustain the high trajectory of growth in future as well. 

Various Members of the Consultative Committee also participated in the discussion. They stated that there should be increase in agriculture share of GDP growth which is at present only around 15% of the GDP. To achieve that end, they suggested diversification of agriculture, use of micro-irrigation facilities, allocation of more credit to agriculture sector, adoption of new technologies for irrigation and higher production and need for bringing out second green revolution in the country. Some Members expressed their satisfaction about increased growth in manufacturing sector but asked for more credit for SMEs which are providing employment to a larger section of the society. Members asked for higher investment in education and health sectors so that common man can get benefit of the same. They also asked for more investment to improve basic infrastructure facilities such as water, sanitation, road, generation of employment opportunities etc. especially in rural areas. Members also asked for higher investment in the areas of research & development, innovation, technology and additional storage facilities for food grains and speedy action to implement reforms especially in retail and insurance sectors among others. 

Minister of State for Finance Shri Namo Narain Meena also attended the meeting alongwith the senior officials of the Ministry of Finance. The Hon'ble Members of Parliament who attended the meeting include S/Shri Anto P. Antony, Arvind Kumar Choudhary, Narahari Mahato, Partap singh Bajwa, S.P.Y Reddy, Vijay Inder Singla, W. Bhausaheb Rajaram, M.S. Reddy from Lok Sabha and S/Shri Rajeev Chandrasekhar, Shantaram Naik, Dr. Ashok Sekhar Ganguli and Dr. E.M. Sudarsana Natchippan from Rajya Sabha.  Inflation control and investment in R&D urged to sustain growth and address trade and investment vulnerabilities. The Finance Minister reported containment of price rise through fiscal and administrative measures, citing lower food inflation and expected higher kharif output, while identifying concerns including trade imbalance, FII volatility, current account pressures and reduced FDI. Emphasis was placed on strengthening the public distribution system, accurate demand projection, and urgent investment in research and development, innovation and skilled manpower, together with agricultural diversification, credit support, infrastructure expansion and reforms to sustain high growth.