NEWSMAKER - Mukherjee takes charge of slowing Indian economy

By Surojit Gupta

NEW DELHI (Reuters) - Congress Party veteran Pranab Mukherjee takes over the job of managing Asia's third-largest economy at a time when it faces slowing growth, worsening public finances, falling exports and huge job losses.

Mukherjee, 73, has decades of experience in government and was the foreign minister in the previous administration. He also held temporary charge of the finance ministry when Prime Minister Manmohan Singh underwent heart surgery in January.

During a speech to present the interim budget in February, Mukherjee called for raising spending to shield the economy from the global slump and stem job losses.

"Conditions in the year ahead are not likely to be normal and therefore the high fiscal deficit," Mukherjee had said, referring to a jump in government spending.

Analysts said the overriding challenge was to revive growth, getting it back on track for the 8-9 percent authorities see as a plausible economic speed limit in the 2010/11 fiscal year.

Growth is expected to have slowed to less than 7 percent in 2008/09 from rates of 9 percent or more in the previous three fiscal years with the fiscal deficit running at the highest since the early 1990's.

Expectations for fresh stimulus to protect growth and jobs have grown since the Congress-led coalition won a decisive mandate last week.

"He has a stiff challenge of reviving the economy while maintaining fiscal balance," said D.K. Joshi, principal economist at domestic credit ratings agency Crisil.