The Indian economy showed clear signs of being on the cusp of recovery after a year of slower-than-expected growth, Finance Minister Pranab Mukherjee said Friday while unveiling the government's annual budget in Parliament, dpa reported.
Mukherjee said global uncertainties like the eurozone debt crisis and political developments in the Middle East had impacted India's growth along with high domestic interest rates and the price of crude oil.
India's gross domestic product was expected to grow 6.9 per cent in the current fiscal year, which ends March 31, after growth of 8.4 per cent in the two years before, Mukherjee said.
"This year's performance has been disappointing, but it is also a fact that in any cross-country comparison, India still remains among the front runners in economic growth," Mukherjee said.
The slowdown was largely due to weak industrial growth but there were signs of a turnaround, he said.
"While we do not have the aggregate figures for the last quarter of [the fiscal year] 2011-12, numerous indicators pertaining to this period suggest that the economy is now turning around," the minister said. "There are signs of recovery in coal, fertilizer, cement and electricity sectors."
Mukherjee said "hard decisions" would have to be taken, including reducing subsidies. The budget included proposals for greater spending on infrastructure - including roads, ports and housing - and for the farming sector.