The Hindu Business Line : Chidambaram maintains GDP will grow at 9%

The Finance Minister, Mr P Chidambaram, on Thursday maintained that economic growth rate in 2007-08 would be close to 9 per cent despite increasing global uncertainties and hinted that “rapid adjustments” in policies would be made to cope with the fallout of turbulence in the global economic environment.

Mr Chidambaram’s Gross Domestic Product growth estimate for 2007-08 is higher than the 8.5 per cent projected by the Reserve Bank of India and almost in line with the 8.9 per cent growth estimated by the Prime Minister’s Economic Advisory Council. The NCAER has also now pegged the GDP growth estimate for 2007-08 at 9.1 per cent.

“I would still maintain what I said earlier that growth rate in 2007-08 will be close to 9 per cent. Which side of nine it will fall I cannot say. But if it falls on the right side of nine, I will be doubly happy”, he told reporters here after the Central Statistical Organisation (CSO) revised upwards the economic growth rate for 2005-06 and 2007-08.

The revised GDP growth rates of 9.4 per cent for 2005-06 and 9.6 per cent for 2006-07 are the highest annual growth rates recorded by the economy since 1991-92 when economic reforms were launched.

With these revised growth rates, the average GDP growth recorded by the economy during the UPA Government’s first three years period of 2004-05 to 2006-07 stood at 8.83 per cent.

“My goal is to continue to maintain growth rate at the current levels. The Government reserves to itself the right to make rapid adjustments in policies depending upon the evolving situation. We have to constantly bear in mind that policies have to be adjusted rapidly depending upon the evolving international situation”, he said.

Asked to comment on the impact of US Federal Reserve’s move to cut interest rates by 50 basis points, Mr Chidambaram said that he could not draw any clear conclusion based on how the markets have opened in the far east and in the US.

“The picture is still uncertain. Let’s wait for a day or two”, he said. Mr Chidambaram also said that the strong jump in capital formation during 2004-05 and 2005-06 showed that there has been an investment boom in the country ever since the UPA government came into office.

“People are investing. They have confidence in future. While domestic savings is driver of such investment, FDI has also played a crucial role,” he said.

More Stories on : Financial Markets | Economy

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page