Economy to improve in coming qtrs - Mukherjee

KOLKATA - India's economy will continue to improve in the 2009/10 fiscal year (April-March) as stimulus packages have helped spur demand, but a full economic recovery will still take time, the finance minister said on Wednesday.

Growth for the fiscal year would exceed 6 percent, Pranab Mukherjee told a conference, despite a poor monsoon.

India, Asia's third-largest economy, grew 6.7 percent in 2008/09, slowing from rates of 9 percent or higher in the previous three years as the global downturn hit harder than expected.

"If the present trend continues, second quarter GDP would be better than the first quarter," Mukherjee said.

The economy grew 6.1 percent in the April-June quarter from a year earlier, picking up from an annual rate of 5.8 percent in the previous quarter.

Deficient monsoon runs, which were running 20 percent below average in mid-September, were a risk to growth, but Mukherjee said late rains have eased the drought situation and would help winter crops.

"With the late monsoon, there is less reason for apprehension because the water situation in the centrally monitored reservoirs has improved," he said.

The government has raised farm subsidies to mitigate the impact of drought and is looking to early sowing of winter crops to offset the loss of summer crops.

Mukherjee said the shortfall in the sowing area of the summer crop was between 60 to 65 million hectares, which could translate into an output shortfall of 14-15 million tonnes.