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| Pranab faces a tough fight against economic crisis | | | AGENCIES
New Delhi: India's new Finance Minister Pranab Mukherjee said on Saturday he would take steps to protect the economy from the adverse impacts of the global slump and promised to return the country to a high growth path.
Growth is expected to slow to less than seven per cent in the year to April 2009 from rates of nine per cent or more in the previous three years. It is seen slowing further to about six per cent in 2009/10.
"Major economic issues have to be addressed, and various efforts will be made to insulate the economy from the adverse impact of the financial meltdown," Mukherjee said outside his house after he was appointed Finance Minister.
He gave no details but he said in February spending might have to be increased to shield the economy from a global slump and stem job losses.
India's Congress-led coalition government led by Prime Minister Manmohan Singh was sworn in on Friday after winning a decisive mandate in a General Election this month.
Besides Mukherjee, Singh named Somanahalli Mallaiah Krishna, another Congress party stalwart, to be the new External Affairs Minister at a time of mounting instability in neighbouring Pakistan.
The Congress-led coalition has a stronger parliamentary majority than the previous administration, meaning the government could last its full five-year term and focus on policy issues without the pressures of a fragile coalition.
Unfettered by its former leftist allies, Congress is likely to push reforms such as raising the foreign investment limit in insurance and opening up the pension sector to spur growth in Asia's third-largest economy.
"The Indian economy is resilient and strong and we shall have to build up to come back to the high growth track as early as possible," Mukherjee said.
With the country's Budget deficit forecast to reach nine per cent of gross domestic product in the year to April 2010, the government will have to decide whether to spend more on social programmes that helped Congress win the election.
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