News: FM cocksure of 8% Indian growth this year
(DNA 09/09/2006) New Delhi - Finance minister P Chidambaram on Friday confidently made three macroeconomic predictions: One, the economic growth this year will be 8% or thereabouts so as to maintain the UPA government’s record of 8% annual growth on an average.
Two, the inflation rate, which has crossed 5% for the latest week, will be contained between 4.5-5% and eventually brought down to 4%. Three, the government will maintain the sanctity of the budget, meaning it will spend within the budgeted limits and achieve the revenue collection and deficit targets.
At a news conference here, Chidambaram presented a strong report card on the economy for the first half of the year and asserted that the Prime Minister and he himself could take “this India growth story” to the world at large during their forthcoming visits abroad.
He said he does not see “any impediments” to growth as such, but is concerned over “too much of gradualisam” in India’s economic reforms process because of which “we are losing out on opportunities”.
“Gradualism has been the hallmark of India’s reforms process and gradualism is perhaps good in the long run”, Chidambaram clarified. “But sometimes I am impatient. I would personally like to see a bit more urgency injected into even that gradualism so that much-needed reforms are not put off indefinitely”, he said.
Asked specifically about the decision to put public sector disinvestments on hold, Chidambaram said he is not unduly concerned but felt the idea of disinvestment had not been properly understood.
“I am for competitive, efficient and performing PSUs. If the companies are listed in the market and if they have some private shareholding, there will be that much pressure on them to perform efficiently”, he said.
Chidambaram said the government continues to encourage foreign director investment (FDI) inflows although there may have been a decision in “one or two cases where one or two Chinese companies may have been kept out on national security considerations”.
He, however, made it clear that no legislation was being proposed to govern FDI proposals from a security angle. “I lean in favour of such investments from China. Each case must be seen in its merit and FDI should not be stopped unless there are overriding security considerations”, he said.
The finance minister conceded that the rise in the prices of essential commodities such as wheat and pulses “has pinched” the common man but he dismissed any suggestion that the high economic growth in recent years has not benefited the “aam admi,” as per the UPA government’s pledge in its Common Minimum Programme.
“There are better roads, better sanitaion, better school buildings, a rural employment guarantee law, more telephones and no hike in rail fares. All these have benefited the common man living in villages”, he claimed.
And for educated youth, there are more jobs and more industries and businesses. In the software sector alone, as many as 150,000 graduate engineers are being recruited this year and the annual intake of engineers will rise eventually to 300,000.
Two, the inflation rate, which has crossed 5% for the latest week, will be contained between 4.5-5% and eventually brought down to 4%. Three, the government will maintain the sanctity of the budget, meaning it will spend within the budgeted limits and achieve the revenue collection and deficit targets.
At a news conference here, Chidambaram presented a strong report card on the economy for the first half of the year and asserted that the Prime Minister and he himself could take “this India growth story” to the world at large during their forthcoming visits abroad.
He said he does not see “any impediments” to growth as such, but is concerned over “too much of gradualisam” in India’s economic reforms process because of which “we are losing out on opportunities”.
“Gradualism has been the hallmark of India’s reforms process and gradualism is perhaps good in the long run”, Chidambaram clarified. “But sometimes I am impatient. I would personally like to see a bit more urgency injected into even that gradualism so that much-needed reforms are not put off indefinitely”, he said.
Asked specifically about the decision to put public sector disinvestments on hold, Chidambaram said he is not unduly concerned but felt the idea of disinvestment had not been properly understood.
“I am for competitive, efficient and performing PSUs. If the companies are listed in the market and if they have some private shareholding, there will be that much pressure on them to perform efficiently”, he said.
Chidambaram said the government continues to encourage foreign director investment (FDI) inflows although there may have been a decision in “one or two cases where one or two Chinese companies may have been kept out on national security considerations”.
He, however, made it clear that no legislation was being proposed to govern FDI proposals from a security angle. “I lean in favour of such investments from China. Each case must be seen in its merit and FDI should not be stopped unless there are overriding security considerations”, he said.
The finance minister conceded that the rise in the prices of essential commodities such as wheat and pulses “has pinched” the common man but he dismissed any suggestion that the high economic growth in recent years has not benefited the “aam admi,” as per the UPA government’s pledge in its Common Minimum Programme.
“There are better roads, better sanitaion, better school buildings, a rural employment guarantee law, more telephones and no hike in rail fares. All these have benefited the common man living in villages”, he claimed.
And for educated youth, there are more jobs and more industries and businesses. In the software sector alone, as many as 150,000 graduate engineers are being recruited this year and the annual intake of engineers will rise eventually to 300,000.
posted by InCar Group Press Room at 13:18
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