Economy to grow by about 7 pc this fiscal: PM

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Acknowledging that the country is going through 'difficult times', Prime Minister Manmohan Singh on Sunday said the economy is expected to grow at 7 per cent in fiscal 2012 and expressed optimism that the rhythm of growth process would be brought back to 9-10 per cent.

Addressing the 10th Pravasi Bharatiya Divas here, Singh said the domestic savings, which currently stands at 33-35 per cent of the country's GDP, will facilitate the realisation of the growth objectives.

"Our country is also going through difficult times. Nonetheless, our economic fundamentals are strong and our constitutional processes are robust. We are up to the task of meeting these challenges."

"Despite an adverse international environment, the Indian economy is expected to grow by about 7 per cent this financial year," he told over 1,900 overseas Indian delegates from 60 countries.

"However, we hope to bring back the rhythm of our growth processes to sustain an annual growth rate of 9 to 10 per cent in the medium term," he said.

The government had earlier projected the country to grow at a rate of about 9 per cent, but amid adverse global and domestic factors, the forecast has been scaled down.

Talking about price rise situation, Singh said, "Our efforts to battle inflation are producing results and there has been improvement in the situation".

Headline inflation has moderated to 9.1 per cent in November, while as per the latest data, the food inflation has entered into the negative territory.

The Prime Minister further said that world is passing through a difficult phase and employment opportunities are drying up globally.

"Many of you are experiencing first-hand impact of the global economic slowdown. Employment opportunities have declined, there is greater protectionism and attitudes towards migration have also hardened. There is growing social intolerance even in more open societies," he said.