Tight money policy, global factors hitting growth rate: FM

Attributing economic slowdown to Reserve Bank's tight money policy and global financial problems, Finance Minister Pranab Mukherjee today said the country needs to target a double-digit growth rate.

"India has to target a double-digit or near double-digit growth in the not too distant future. We must learn to sustain high growth over extended period of time," he said while addressing a conference of the industry chamber Assocham.

The economic growth during 2011-12 is estimated to slip to three-year low of 6.9% from 8.4% a year ago. This slowdown, Mukherjee hoped, would be temporary and the country would be able to revert to high growth trajectory in the years to come. The Minister is expected to announce steps to boost growth in the budget for 2012-13 to be presented in the Lok Sabha on March 16.

India was growing at over 9% before the global financial crisis of 2008 pulled down country's growth rate to 6.7% in 2008-09. Pointing out that global factors and tight monetary policy of the RBI slowed down growth, Mukherjee said, "I expect this slowdown to be temporary and economy would soon revert to the high growth trajectory."

The Minister further said that the policy measures taken in recent months to ease the capital control would make available additional resources for the infrastructure sector. The Reserve Bank has increased the interest rates for 13 times since March 2010 to tame rising inflation. However, the central bank has lately indicated that it would lower the interest rates to boost growth.

The central bank is scheduled to announce mid-quarterly review of monetary policy on March 15.