Jaipur, Jan 12 (IANS): India's "growth story is intact" and the goverment would target more than eight percent growth in the next financial year on the back of easing inflation and rate cuts by the central bank that would stimulate private investment and demand, says Minister of State for Finance Namo Narain Meena.

"Our growth target for the next financial year will be eight percent plus. In the medium-term, say, in two-three years, we target to reach double-digit growth," Meena told IANS in an interview here.
Meena was in Jaipur to attend the three-day Pravasi Bharatiya Divas, the annual congregation of the Indian diaspora.

Indian's gross domestic product (GDP) growth is estimated to fall to seven percent in the financial year ending Mar 31, against the budgetary target of nine percent (plus-minus 0.25 percent). The economic growth was 8.5 percent in 2010-11.

"In the current financial year, we could not meet the growth target because of global slowdown. Inflation remained higher than expected. It also affected the real GDP growth," said Meena, adding things were likely to improve in 2012-13.

The minister said inflationary pressure was easing and overall inflation would come down to 6-7 percent by March-end this year.

"Our priority is to bring inflation down and increase growth. Inflation is more or less under control. Food prices have in fact declined; so the focus will be on growth."

After remaining near double-digit for almost two years, food inflation has dropped sharply in the last two months. In fact, food inflation slipped into negative for the first time in six years. Food inflation dipped to minus 3.36 percent for the week ended Dec 24 as compared to 20.84 percent during the corresponding period of last year.

The headline inflation based on the wholesale price index, however, remain at an elevated level. It was recorded at 9.11 percent in November.

The minister said with easing inflationary pressure the central bank would cut rates that would boost private investment and demand.

"There is a substantial improvement on the inflation front; so the RBI can now cut rates," he said.

The Reserve Bank of India last month kept policy rates unchanged after hiking the key rates 13 times since the beginning of 2010. The aggressive monetary tightening has made cost of capital expensive, hurting industrial and overall economic growth.

After registering a slower growth in the April-September period, industrial output slipped into negative zone and fell by 5.1 percent in October. The GDP growth fell to 6.9 percent in the second quarter of the current financial year, according to the latest available data.

"Despite the slowdown, India remains one of the fastest growing economies in the world. High savings rates and strong domestic demand will drive our growth in the future," said Meena.

He said India's economic fundamentals were strong and it would remain an attractive destination for overseas investors.

Asked about the impact of graft and corruption controversies on business sentiments and overseas investments, Meena said: "These things are temporary. The long-term India growth story is intact. We have strong demands. Foreign investments are increasing."

Meena said a lot of overseas investments are likely to come to India from the Gulf countries in the coming years.

"Gulf countries have started looking East. India is the obvious choice," he said.

On the date of presentation of the union budget for 2012-13, Meena said it would be after the assembly election process was complete. "Because of the assembly elections, budget will be delayed. The date has not been finalised yet."

The general budget is usually presented on the last day of February every year.