The Indian economic system will grow by 7% during the existing fiscal even as latest projections by worldwide agencies like the International Monetary Fund (IMF) stated that the economies of developing countries would shrink by 2%.

This was stated by Union External Affairs Minister Pranab Mukherjee at the 81st annual general meeting of the Federation of Indian Chambers of Commerce and Industry (FICCI).

Speaking on this, Mr. Pranad said, “I am proud to say that in 2008-09 India will still grow by 7 per cent.”

He also mentioned the most recent growth projections by IMF, which said that advanced countries would shrivel by 2 per cent.

At the same time, the minister also said that it was not going to be a smooth ride for the country.

“India faces a special challenge from the international financial crisis. In a globalised economy while India cannot be immune to the impact of the crisis, we have to address this on many fronts,” he said.

He also said that the Indian administration would be exploring various paths with the intention to encourage development.

Mukherjee added, “There is a need to sustain our foreign trade, revive foreign investment and generate domestic demand in order to maintain our growth rate, which are essential to the uplift of the multitude below poverty line.”

“India remains committed to work with its friends including the G20 for devising a new global financial structure,” he also added.

At the silver jubilee conference of Research and Information, last week, Mr. Mukherjee said that the Indian government would take more steps to guarantee that the labour-intensive sectors are less adversely affected.

Mukerjee advised global financial organizations to put more resources into developing nations, especially in rural areas, skill development, and infrastructure, and to strengthen local communities.

He stressed that the harsh rate of growth in the developing countries is likely to change the structure of global economic governance and the failure to recognize changing structure of the worldwide financial system would result in new investment barriers and global market fragmentation.

Recently a survey released by the government said that more than 5 lakh workers lost their jobs in the December quarter.