Domestic demand, homegrown reforms will help growth: Patil

New Delhi, Feb 12 (PTI) The Indian economy is set to maintain its growth momentum, aided by demand from its over one-billion strong people and calibrated reform policies that have withstood the gloomy global environment, President Pratibha Patil said Thursday.

"Even in the prevailing adverse global environment, our
economy, it is hoped, would still register a relatively high
growth rate," she said in her customary address to the joint
sitting of Parliament.

India's GDP is officially pegged to grow by 7.1 percent
against 9 percent in the last three years, but is still
considered good when most developed economies are facing
recession.

She said the "calibrated and prudent" economic reforms
pursued by the UPA government helped the country to weather
extreme adversities of the global economic meltdown.

"India's domestic demand can inject fresh momentum to our
economy," Patil said, adding that the fundamentals of the
economy are better than most others.

The government, through the President's address, drove
home the point how it insulated the people from sharp rise in
global commodity prices last year. "This shock was in large
measure absorbed by the government and the citizen insulated,"
Patil said, adding that inflation has been brought down from
12 percent in September to 5-6 per cent in January.

Inflation has now fallen below five percent, following a
reduction in retail fuel prices in line with falling crude oil
prices in the global market.

Patil said the government has taken a series of measures
to stimulate the economy. These steps would drive demand for
goods and services reviving production activities in the
manufacturing as well as services sectors.

As the global downturn started hitting the Indian economy
in the second half of the current financial year, the
government intervened through two stimulus packages - first in
December and then another in January.

The measures included reduction in taxes and duties,
boost to infrastructure sector, injection of liquidity by the
Reserve Bank of India and specific steps to the worst affected
sector like exports, housing and automobile.

Besides, the Centre relaxed norms (FRBM) governing
spending to stimulate the economy.
"My government has relaxed the constraints imposed by the
fiscal responsibility and budget management act to increase
capital expenditure by the state governments," she said.

Referring to the UPA government's track record on the
economic front in the last four years, the President said that
high growth enabled it to provide enough resources for
development. It also helped the government implement the Sixth
Pay Commission recommended salaries for its employees. PTI PC
PMR