India will need to take "difficult decisions" to revive economic growth that slumped to a decade-low of 5.4 percent in the first half of the current financial year, President Pranab Mukherjee said Thursday.
"The Indian economy is currently experiencing slower growth. Real GDP grew by 5.4 percent in the first half of the current fiscal year. This is significantly lower than the average of around 8 percent in the last decade," Mukherjee said while addressing a joint sitting of both houses of Parliament.
He said India's economic growth has slowed in the past two years because of a combination of global and domestic factors.
India's economic growth slumped to 6.2 percent in 2011-12 after registering a growth of around 8 percent in the previous 10 years.
The situation has worsened in the current financial year, with the government's statistics department cutting the estimate of the GDP growth to 5 percent for the year ending March 31.
Mukherjee pointed out that the Indian economy had registered 8 percent growth in the 11th Plan period (2007-12).
"The 12th Plan recognises that growth outcomes will depend upon the extent to which we are able to take some difficult decisions. The Plan proposes to consolidate centrally sponsored schemes into a smaller number and increase their flexibility," he said.
"My government is taking steps to deal with the factors responsible for the slowdown," he said.
In his first address to the joint session of Parliament on the first day of Budget session, the president said that despite the moderation in the recent months inflationary pressure continued in the Indian economy.
"Inflation is easing gradually but is still a problem," he said.
"In recent months, there have been positive developments too. There has been a moderation in core inflation and recovery in growth is likely. Policy measures announced during the year have also restored optimism at home and abroad," he said.
India's core inflation based on wholesale price declined to three-year low of 6.62 percent in January, according to official data released last week.
On fiscal consolidation, Mukherjee said fiscal deficit will be contained at 5.3 percent of the GDP in the current financial year.
"My government has announced a roadmap for fiscal consolidation by containing the current year's fiscal deficit at 5.3 percent of the GDP. The government is also working with state governments to reach a consensus on the Goods and Services Tax (GST)," he said.