Dismissing IMF’s growth projection of 3.75 per cent for India as pessimistic, Finance Minister P. Chidambaram has said that the country’s economy is expected to grow by 5 to 5.5 per cent in the current financial year on the back of good monsoon, robust farm output and impact of reform measures undertaken by the government in the past one year.

“We expect these measures to show their impact from the second half of the current fiscal and believe that the Indian economy will grow at over 5 per cent and perhaps closer to 5.5 per cent in 2013-14,” he said in his address to the Carnegie Endowment for International Peace, an eminent US think-tank.

“I know that the World Economic Outlook report (of the IMF) does not share my optimism, but I may tell you that we do not share their pessimism,” Chidambaram said highlighting six key fundamentals of the Indian economy, including financial system, skilled workforce and strong corporates that have been contributing to the country’s growth momentum.

“Set against the current global economic background, even a growth rate of 5 per cent looks good, but is much lower than the ambitious standards that we set for ourselves in 2004,” he said.

The Minister said: “Every year, our financial system is getting better and stronger and, through this, we expect to translate our good investment to GDP ratio into a higher GDP growth rate.”

Defending the FDI policy amid reservations being raised by retail giants like Walmart, he said they always ask for more but were expected to work within the policy framework.

“We have a policy. Genuine investor must work within that policy. It may not be the ideal policy from his point of view. But this is the policy that we have today. You have to take it as it is,” Chidambaram said.

“I am confident that one or two multi-brand retailers will enter India before the financial year is out. I think, one is just at the door step,” he said, without naming anyone.

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