Tuesday, March 23, 2010

GDP growth projected at 8.5%, India overcomes slowdown.

Speaking at the opening session of a workshop on Delivering Financial Literacy co-hosted by Reserve Bank of India and the OECD in Bangalore on Monday, Union finance minister Pranab Mukherjee said that the country had successfully overcome the effect of the global economic slowdown and that the GDP is expected to grow at 8.5% during fiscal 2010-11, plus or minus 0.25%.

In a cautiously worded statement, he said, ‘As far as this financial year is concerned, it is coming to an end in a few days. The final figures would be known later, though we are sticking to the earlier estimate of 7.2% growth’’.

The finance minister also said that financial literacy was critical to financial inclusion and all stakeholders including governments, financial institutions, employers, trade unions and consumer groups had a key role to play in improving financial literacy. Highlighting the importance of financial literacy amongst individuals, he said, “The recent global financial crisis has raised the question whether individuals lack of financial knowledge led them to take out adjustable rate mortgages (ARMs) or incur credit card debt they could not afford’’.

Also highlighting the need to restructure public policy to facilitate financial inclusion, he said, “While the financial sector policies in India have long been driven by the objective of increasing financial penetration and outreach, the goal of universal inclusion has eluded us. What we need today are new approaches to financial inclusion that built on the lessons of the past. Importantly, it also requires a change in the mindset on the part of policy makers, practitioners and other stakeholders to figure out and put in place effective ways of reaching out to the hitherto un-reached and under-reached segments of our population.’’ 

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