New Delhi, February 27:
Indiaâ€™s economy has â€˜taken offâ€™ but rising prices are a key worry, the government said on Tuesday, a day before the release of the national budget expected to contain inflation-fighting measures.
Economists have expressed concern about Indiaâ€™s economy overheating with growth running at more than nine per cent and inflation near two-year highs.
â€œThe economy appears to have decidedly taken off and moved from a phase of moderate growth to a new phase of high growth,â€ the finance ministry said in its annual report card on the economy.
â€œHowever, there are some genuine concerns on the inflation front,â€ said the economic survey released by Finance Minister P Chidambaram in parliament.
The upbeat report came a day ahead of the annual budget expected to highlight measures to contain inflation as the ruling Congress government faces a slew of state elections in which rising prices have emerged as a major issue.
The state elections are seen as a dress rehearsal for federal polls which must be held by May 2009.
â€œWe share the concern (over inflation) and we have taken a number of steps to moderate prices and we will continue to take steps,â€ Chidambaram said outside parliament.
Inflation fell back to 6.63 per cent last week from a two-year high of 6.73 per cent earlier in the month but remains far above the central bankâ€™s tolerance level of 5.0 to 5.5 per cent.
The price rises, driven by rises in the cost of food and raw materials, have especially hurt
Indiaâ€™s poor masses who helped bring Congress to power in 2004.