India's Economy Expected to Grow 8 Pct.
NEW DELHI (AP) -- India's economy is expected to grow by nearly 8 percent this fiscal year - an acceleration likely to be sustained in coming years, the finance minister said Tuesday.
Growth of 7.5 percent to 8 percent is likely to make India the world's fastest growing economy after China, Finance Minister Jaswant Singh told India's Parliament. India's fiscal year runs from April through March.
Next year, "we will maintain this growth, if not improve on it," Singh said after presenting an interim budget ahead of national elections expected in April or May.
The budget increases salaries for nearly 3.5 million federal employees at a cost of about $800 million annually, a move analysts said could worsen the deficit.
But Prime Minister Atal Bihari Vajpayee said India aims to be in the league of developed nations by 2020, and Tuesday's budget proposals will "further help the country move in that direction."
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Singh also said customs rules will be simplified to benefit exporters and tourists, and the government will not impose business taxes on foreign companies who outsource services in India.
Also in the budget were credit incentives for farmers, hospital and airport upgrades, and new drinking water projects for big cities - mostly in states ruled by the governing coalition.
The opposition said Singh's interim budget was aimed at winning votes. Shivraj Patil, a leader of the main opposition group, the Congress party, also said the government's growth projection was misleading.
This year's high growth rate is attributed largely to a bumper harvest caused by good monsoon rains, following a drought last year in many parts of the country.
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