The Hindu Business Line : ‘Indian economy could grow close to 8% in 2008-09’

Never before, the world faced the unprecedented scale of financial crisis in the same year after the economic slowdown, inflation and shortage of food and fuel. — Chidambaram

Kamal Narang

The Finance Minister, Mr P. Chidambaram, and the Federal Minister for Economic Cooperation and Development, Germany, Ms Heidemarie Wieczorek-Zeul, at the ‘50 Years of Indo-German Development Cooperation’ in the Capital on Monday. —

Our Bureau

New Delhi, Oct. 20 The Finance Minister, Mr P. Chidambaram, on Monday said that the Indian economy is expected to grow close to 8 per cent in fiscal 2008-09 despite the global financial turmoil.

“Despite, the global slowdown, we hope that the Indian economy would grow close to 8 per cent.

“The global financial crisis will not directly affect India as the Indian financial system has sound fundamentals. We have also taken a number of measures in the recent days to boost liquidity,” Mr Chidambaram said on the occasion of the ceremony celebrating 50 years of Indo-German bilateral development cooperation.

Difficult times

The Finance Minister noted that the present times were one of the most difficult times in the modern history.

“Never before, the world faced the unprecedented scale of financial crisis in the same year after the economic slowdown, inflation and shortage of food and fuel,” he said.

Ripple effects

Stating that most of the banks in Indian have negligible exposure to sub-prime lending, Mr Chidambaram, however, said that the country was facing ripple effects of the global financial meltdown.

German partnership

On Indo-German cooperation, Mr Chidambaram said that the strategy paper released today would delineate the framework for the future bilateral development cooperation adding a new leaf to the ever evolving and growing partnership.

In view of the limited overseas development assistance (ODA) available to India for attainment of Millennium Development Goals (MDG), Mr Chidambaram said that India would prefer that there should be not be dilution or diversion of ODA to meet climate change challenges, for which in terms of UNFCCC mandate, developed countries ought to provide additional funds for technology transfer.

“We feel that the developed world has to contribute further to meet the target of 0.7 per cent of GNI for attainment of MDGs globally,” he added.

Poverty elimination

Later at a press conference, Ms Heidemarie Wieckzorek-Zeul, the visiting German Federal Minister for development co-operation, noted that the developed world could mobilise billions of dollars for poverty elimination in developing countries when they have mobilised billions of dollars for saving investment banks and financial institutions.

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