Strong case for boosting external trade to combat slowdown: Pranab

NEW DELHI: External Affairs Minister Pranab Mukherjee acting as the finance minister said on Thursday that there is a strong case for stimulating
domestic demand and boosting external trade to combat economic slowdown and poverty.

The statement comes three days ahead of the country's interim budget. Mr Mukherjee is slated to present the interim budget in the Lok Sabha on Monday.

"There is a need to sustain our foreign trade, revive foreign investment and generate domestic demand in order to maintain our growth rates, which are essential for the uplift of the multitudes below the poverty line," Pranab Mukherjee said at the annual meeting of industry body Federation of Indian Chambers of Commerce and Industry.

The global financial crisis and the subsequent slowdown has reduced the country's exports and domestic industrial output. The economy is expected to grow at 7.1% in the 2008/09 fiscal year, down from 9% last year.

On Thursday, data showed that industrial production contracted 2% in December from a year earlier, as firms cut production fearing lower sales and inventory pile ups.

The minister, however, expressed optimism that the country, would still perform much better than most other nations in the world. "I am happy to say that in 2008/09 India will still grow by around 7%," he said.

"As we stand out in the world as one of the key growth centres, I remain confident that we will be able to attract more foreign direct investment (FDI) and that foreign institutional investment (FII) flows will return to our markets because this is where growth is happening and this is where profits can be made," Mr Mukherjee said.