Faced with the impact of the global downturn as well as drought, the government said on Tuesday it would take 'longer time' for the country to achieve the 9 per cent growth as witnessed before the financial crisis hit the world in September, 2008.
"To achieve 9 per cent growth (it) will require little longer time", Finance Minister Pranab Mukherjee said, participating in a function organised by a private TV channel.
Mukherjee said this fiscal 'we will have six per cent plus growth.'
'Whether that will be 6.5 or 6.2 per cent I cannot say. To achieve 7 to 8 per cent, (it) will be possible in the short term.'
Promising to continue reforms in various sectors of the economy, the minister said, 'the process (which) began in the early 90s will continue in the right earnest so that the economy is back on the path of 9 per cent growth at the earliest.'
Having grown by nine per cent during the three years ending March 2008, India's economic growth rate slipped to 6.7 per cent during 2008-09, mainly on account of the impact of the global financial crisis.
With 246 districts out of a total of about 600 facing drought, the growth rate is estimated to decelerate further to little over 6 per cent. The Reserve Bank of India in its first quarterly review of the credit policy projected 6 per cent growth rate for the current fiscal with upward bias.
The top priority of the government, Mukherjee said, would be to mitigate the impact of the deficient rainfall on the agriculture sector as well as the economy as a whole.
"At this juncture, delayed monsoon has impacted many parts of the agrarian economy ... Mitigating the impact of deficient monsoon is a high priority," he said.
"Despite the global economic crisis, we grew by 6.7 per cent last year... This year, we are getting mixed signals," he said, noting that indicators are coming good from industrial production data and in terms of business demand and investor confidence.
The minister, however, added that the government was not in a position to lower its guard, given the continuing uncertainties in the global economic scenario.
Referring to large government borrowing programme during the current fiscal, Mukherjee said it will not have any impact on the interest rates as is being feared by the industry as well as bankers.
The government proposed to borrow Rs 4.5 lakh crore (Rs 4.5 trillion) from the market during the year as compared to Rs 3.1 lakh crore (Rs 3.1 trillion) in the previous fiscal.
The government, the minister said, was also working on a proposal to set up a debt management office to manage public debt.
On disinvestment, Mukherjee said, the intention of the government was not only raise money by offloading shares of the state-owned enterprises but also to make them more efficient.
In his budget speech, the Minister had said, 'the PSUs are wealth of the nation, and part of this wealth should rest in the hands of the people. While retaining at least 51 per cent government equity in our enterprises, I propose to encourage people's participation in our disinvestment programme."
Talking about taxation reforms, Mukherjee said the direct taxes code will improve the efficiency of the taxation structure in case of direct taxes. Similarly, he added, goods and services tax would reform the indirect tax structure.
The government proposes to replace the Income Tax Act, 1961 with a new code, which was recently released for public debate. The GST is proposed to be implemented from April 1, 2010.