India eying double-digit growth by 2012: Mukherjee

NEW YORK - India is targeting double-digit economic growth by 2012, buoyed by an estimated near nine percent growth in the first quarter of the current financial year, Finance Minister Pranab Mukherjee has said.

The challenge now is to quickly revert to the high GDP growth path of an average of 9 percent plus and even find the means to cross the double-digit growth barrier in the coming year or two, Mukherjee said at the 7th annual India Investment Forum meeting here Wednesday.

The Indian economy grew 8.8 percent in the first quarter of fiscal 2010-11. The government believes growth is likely to surpass the budgetary target of 8.5 percent this fiscal.

Mukherjee said the government was committed to further reform the economy and make growth process more inclusive.

We are looking to address the weaknesses in our systems, structures and institutions at different levels of governance, making the public delivery mechanisms more robust and transparent, and sharply focus on the role of the government as an enabler, he said.

On financial sector reforms, Mukherjee said the government has decided to set up a Financial Sector Legislative Reforms Commission to rewrite and clean up the financial sector laws and bring them in line with the requirements of the sector.

He also pointed out that the government has decided to setup an apex-level Financial Stability and Development Council (FSDC) to strengthen and institutionalise the mechanism for maintaining financial stability in the country.

Without prejudice to the autonomy of regulators, this council would undertake macro prudential supervision of the economy, including the functioning of large financial conglomerates, and address inter-regulatory coordination issues, said Mukherjee.

It will also focus on financial literacy and financial inclusion. We hope to institutionalise these arrangements very soon.

Reiterating the government’s commitment to reform banking and financial sector, Mukherjee said it would be done taking into account the local requirements.

Banking sector has come into sharper focus after the global crisis. The fact that India has not gone through any financial turbulence as a result of the earlier phase of financial deregulation is not only remarkable, but a testimony to our consistent view that reforms in global standards have to be adapted to local conditions, he added.

Finance minister said the Reserve Bank of India (RBI) will soon issue new banking licenses to private players, in a bid to diversify banking network in the country.