High GDP without benefits pointless: FM

Cautioning that a high economic growth bereft of benefits to the poor would not achieve the national goal, government on Friday asked banks to focus on the weaker section of the society.

Speaking at a function in New Delhi, Finance Minister Pranab Mukherjee said banks should expand their reach and contribute to inclusive growth as high gross domestic product numbers without benefiting the poor remain just a statistical number.

He said one should not be complacent at 8.5 per cent growth expected this fiscal, and that the country must overcome the hurdles for double digit growth.

"We cannot remain satisfied with this growth (8.5 per cent expected this fiscal). We shall have to cross the barrier of double digit growth," Mukherjee told a Canara Bank function.

He said even though International Monetary Fund has projected Indian economy to grow by over 9.7 per cent this year, he would stick to the growth projection of 8.5 per cent this fiscal.

IMF uses a slightly different methodology for calculating gross domestic product by including Indirect taxes, while Indian government measures the economic growth excluding indirect taxes.

Besides, IMF measures the growth for the calendar year, which Indian government calculates it for the fiscal year.

Indian economic growth bounced back to 8.8 per cent for the first quarter of this fiscal after shrinking considerably following the impact of the global economic crisis in 2008.

The finance minister asked banks to expand their reach and contribute to inclusive growth as high GDP numbers without benefiting the poor remain just a statistical number.

Mukherjee said there would be an estimated gap of 30 per cent for the one trillion dollar investment pegged for infrastructure during the 12th five year Plan (2012-17).

"We have to breach that gap," the finance minister said. In order to have better coordination among regulators, Mukherjee said, 'ministry has decided to establish the Financial Stability and Development Council'.

A discussion paper has been circulated in coordination with the RBI. Referring to another set of reforms, Mukherjee said, "Another important legislation which we are going to have for which we have set up a committee that is Financial Legislative Reforms Commission."

The objective is to update various financial sector related legislation, so that it can be in tune with prevailing condition, he said.