Economy to soon revert to 8-9% growth trajectory: President

New Delhi, Mar 12 (PTI): The Indian economy will soon revert to the 8-9 per cent growth trajectory on the back of strong fundamentals and favourable domestic factors, President Pratibha Patil said on Monday. "My government is confident that it will soon steer the country back to the high growth trajectory of 8-9 per cent," Patil said while addressing the joint sitting of Parliament that heralds the beginning of the Budget Session. As regards the current fiscal (2011-12), she said the growth will slow down to 7 per cent from 8.4 per cent last fiscal but "this remains a healthy growth given current global trends". The long-term fundamentals of the Indian economy remain robust, she said, adding, "India's growth prospects arise from factors such as high domestic savings and investment rates, favourable demographics, and a stable democratic polity." Referring to inflation which has remained a major challenge for the government, Patil said the actions taken by the Reserve Bank and the government have yielded results and "general inflation inflation has ... eased." Recounting the steps taken to contain price rise, she said, "The Government has taken several measures to ease the supply constraints, like reduction in import duties and a calibrated ban on exports. In order to ease the pressure of high international prices on fuels, custom duty on crude oil and import duty on petrol and diesel has been reduced." The economy grew at an average rate of more than 9 per cent between 2005-06 and 2007-08. The growth rate fell to 6.7 per cent in 2008-09 on account of global financial crisis, but recovered the momentum to 8.4 per cent in 2009-10 and 2010-11. Patil said increased political uncertainty and turbulence globally have made it more challenging for countries across the world to maintain high growth rate. "The current year has been a difficult one for the world economy. Economic uncertainties have had an adverse impact across the globe," she said. Patil said the government is taking many steps to contain the generation and outflow of illicit funds from the country and for opening channels for getting wider information on black money from other countries. "The Government has initiated action on various fronts to tackle the menace of black money," she said adding that the new Income Tax Overseas Units, Double Taxation Avoidance Agreements (DTAA) and Tax Information Exchange Agreements (TIEA) would help contain tax evasion. "Efforts are underway to build political consensus on the Goods and Services Tax (GST), which will give a major boost to the economy by rationalising indirect taxes and giving full input credit," she added. Patil said the 2012-13 fiscal would mark the first year of the 12th Five Year Plan that sets the goal of "faster, sustainable and more inclusive growth". "The Approach Paper sets a target growth rate of 9 per cent for the 12th Plan period with 4 per cent growth for the agriculture sector," she said. The President said that he government is committed to recapitalise the public sector banks to the extent necessary to main their financial health. She also said the government has taken several steps to attract overseas capital to India by liberalising rules relating to external commercial borrowings (ECBs) and others relating to foreign institutional investment (FII). Patil said the government is working towards doubling merchandise exports to USD 500 billion by 2013-14.