Indian Economy Poised To Grow At 7%

Prime Minister Manmohan Singh said Oct. 27 that India's economy was poised to grow at 7% in the fiscal year ending March 2006, but that a slump in the farm sector was thwarting growth prospects.

"If we have to achieve our ambitions of growing at a rapid pace of over 8% per annum, we must aim at an agricultural growth rate of over 4% per year. Unfortunately, this has not been so in the recent past with average agricultural growth rates of just 1.5% in the past three years," Singh said in a newspaper interview, urging agricultural scientists to find ways to improve output. New technology and innovative methods would give farmers more choice and help them plan cultivation in a demand- rather than supply-driven environment, Singh said. In its annual budget for 2005-2006, Singh's government offered massive incentives to farmers to boost output.

India's farm sector accounts for nearly a quarter of India's gross domestic product and employs about two-thirds of the workforce. The health of the agriculture sector is closely linked to the country's economic growth as rural consumers are key drivers of demand.

Meanwhile, a cabinet meeting chaired by Singh late Oct. 27 gave the go-ahead to repeal two laws that imposed taxes on exports of agricultural products. The removal of the taxes on exports will make Indian agricultural products more competitive in the global markets according to an official release. "We cannot subsidize exports like the developed countries, but at least let us not tax them," said Indian Trade Minister Kamal Nath.

Copyright Agence France-Presse, 2005

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish