"The past year has been a very difficult one for the global economy. Most emerging markets are growing very slowly. It has been a difficult year for India also," he told a joint session of parliament.
"Both global and domestic factors have affected our growth. We need to address the impact of both. My government has responded to the situation by taking several measures to revive investment activity and sentiment."
Mukherjee said that an important initiative by the government was the rollout of the Direct Benefits Transfer System.
"This would enable government sponsored benefits such as scholarships, pensions and maternity benefits to flow directly into the accounts of beneficiaries who can access them using their Aadhaar number. In due course, the system will also cover wages and subsidies on food and LPG.
"This system will help cut down leakages, bring millions of people into the financial system and lead to better targeting of beneficiaries. It will be a trend-setter in the use of modern technology to bring benefits to our poorest citizens, especially in rural areas," he added.
The president, however, asserted that the system will not be a substitute for public services and will be complementary to the public distribution system.
"The average annual growth rate of GDP in the 11th Plan, which concluded last year, was 8 percent. A notable feature of the Plan was the progress towards achieving inclusiveness with a faster decline in poverty than in the previous decade," Mukherjee said.
"The National Development Council has adopted the 12th Five Year Plan, which further sharpens the focus on faster, more inclusive and sustainable growth.
"The 12th Plan recognizes that growth outcomes will depend upon the extent to which we are able to take some difficult decisions.
"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," the president said.
Blaming slower growth on global and domestic factors, Mukherjee said: "My government is taking steps to deal with the factors responsible for the slowdown. Inflation is easing gradually but is still a problem.
"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.
"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."