Finance Minister Pranab Mukherjee on Tuesday expressed hope that the economy would soon return to a high growth trajectory , but cautioned that high inflation and heavy borrowings posed significant challenges. We shall have to move towards the betterment, towards the development and 9% to 10% growth is achievable. It is not a pipe dream, he said while winding up the discussion on the General Budget in the Rajya Sabha.
For 2010-11 , the government has pegged economic growth at 8.5% of the GDP and has said that 10% growth may be possible in the near future. But the minister warned that high inflation could eat into the benefits of growth.
Though the government has taken a number of steps to cool prices, he said that inflation could touch 10% next month because of its low base. I will not be surprised if it (inflation) reaches double digit in March, he said, adding that the impact of low base may remain for few more months, till May or June this year.
The wholesale price index based inflation has already touched 9.89% in February. Inflation numbers for March will be announced in mid-April .
The Centre has taken a number of steps to help the vulnerable sections of society, Mr Mukherjee said, adding that the Prime Minister would soon be meeting chief ministers to take stock of the price situation.
Meanwhile, the finance minister also stressed that the government needs to curb its expenditure as well as borrowing targets. Our fiscal credibility will otherwise be seriously challenged, if we indulge in financial profligacy. It is not possible, he said. We had to borrow over Rs 4,00,000 crore in the current fiscal... Living on unlimited borrowing is not possible, Mr Mukherjee said.