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Mr P. Chidambaram

Our Bureau

New Delhi, Aug. 31

Buoyed by the 9.3 per cent growth in gross domestic product (GDP) in the first quarter and inflation falling below four per cent, the Union Finance Minister, Mr P. Chidambaram, on Friday expressed confidence over the economy expanding by close to nine per cent this fiscal.

“As long as savings are high, capital formation remains high, it supports the hypothesis that investment will remain buoyant. I am confident that GDP growth rate would remain close to nine per cent this year as well,” Mr Chidambaram told reporters here.

He felt that this should help revise the average GDP growth of 8.6 per cent over the past three years. The Finance Minister said that GDP growth of 9.3 per cent in the first quarter, although a shade below the 9.6 per cent growth in same period last year, was “quite satisfactory” given the circumstances on account of the external situation.

Mr Chidambaram said that the Government would make all efforts to ensure that credit flows to productive sectors are not reduced.

“Despite compulsions of a tight monetary policy, we will ensure that credit flow to the productive sectors of the economy remains strong,” he said.

The Finance Minister also highlighted that electricity, gas and water supply segment has showed better performance by recording 8.3 per cent growth in first quarter of current fiscal compared to 5.8 per cent growth in the same period last year.

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