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Monday, February 22, 2010

Govt to aim for higher growth, focus on food security

India's economy will accelerate in the coming years as it recovers from the global downturn and the government will act to protect the poor from the impact of food inflation, the president said on Monday.

Pratibha Patil said the economy was likely to grow about 7.5 percent in the current fiscal year ending in March, and the government would aim for annual growth rate of 8 percent in the next fiscal year and 9 percent in 2011/12.

"It is imperative that as our economy grows apace, the disadvantaged sections of society be made part of the Indian success story," Patil said in a speech opening the budget session of India's parliament.

Asia's third-largest economy is recovering, with factory output surging, but food prices are growing at the fastest pace in 11 years and the government fears a backlash from millions of rural poor who are its main voters.

The president's annual speech, which lays down the priorities of the government for the year, reflected those concerns over inflation as food prices keep rising at an annual rate of nearly 20 percent, primarily because of a poor summer harvest.

"In the longer term, our food security can be ensured only through sustained efforts at increasing agricultural productivity combined with a comprehensive reform of the public distribution system and open market intervention," Patil said.

"My government is committed to bringing forth legislation to ensure food security."

Rising prices have sparked opposition-backed street protests and left the government little elbow room to push through financial reforms such as easing fuel price controls. But the ruling Congress party faces no risk of losing power anytime soon.

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