Chidambaram hopeful of 2013 ending on a brighter note
Washington: Noting that India is one of the few countries which are growing at more than five per cent, Union Finance Minister P Chidambaram Friday hoped that 2013 will end on a positive note, even though the growth is sluggish at the moment.
"We predict 6.1 to 6.7. IMF (International Monetary Fund) today said it will be 6.2. So there are only a few countries which are growing at more than five percent. And more than six percent I think there are only two or three," he said.
"So growth is sluggish. There is no clear sign of a swift or a rapid recovery. 2013 will be a difficult year. But hopefully the year will end on a brighter note," Chidambaram told the popular Charlie Rose Show on the PBS channel.
On his second ever appearance on the Charlie Rose Show, Chidambaram said India has resources.
"Once we get into that growth mode, if you compound every year at six percent or seven percent, your economy becomes a very large economy," he said.
In India's case there is an additional advantage the demographic dividend, he said adding that by 2020 India will be the youngest nation in the world, with a median age of 29.
"If it is a population that is not literate, not skilled, not trained, it becomes a drag but if you are able to educate them, skill them, train them, it becomes an asset.
"And in India's case, as more people move out of agriculture, which is a low skill, low-paying job, into services sector manufacturing sector, they don't have to be clever up," he said.
"They simply have to move into better jobs that will increase productivity. It will also contribute more to the GDP. So the migration of population from agriculture, rural to urban, semi-urban services and manufacturing will give a big boost to the GDP growth," the Finance Minister said.
Responding to a question, Chidambaram said that unlike China India is capable of managing its social tensions.
"In the case of India we have been a plural society for nearly 2,000 years. Christianity came to India 2000 years ago. Islam came to India many centuries ago. I think we learn to manage tensions.
"We know to manage tensions and these tensions will surface but we'll manage them. We are not a society in which social tensions are a new phenomenon," he said.
Chidambaram said China is "more homogeneous" in terms of a dominant race, dominant language, dominant culture, with some provinces which are different.
"The tensions are in the provinces which have different cultural and religious characteristics. They have to learn to manage those tensions. They are finding it difficult in one or two provinces. But I hope they will find a way to accommodate the concerns of these different provinces," he noted.
Chidambaram said India needs to learn from countries like China and Japan on how to execute projects in time without cost overrun.
"We need to learn, for example, from the Japanese or the Chinese how to execute a project on time without a cost overrun. If there is one thing that I would like to learn is how do execute a large project without a cost overrun or a time overrun," he said.
This is because, Chidambaram said Indians tolerate inefficiencies.
"We tolerate inefficiencies. We don't punish people enough. We don't hold people accountable. It's a generally a very tolerant country. Well, tolerance is good in every other area. I think, in executing a project one has to be a little intolerant holding people accountable to what they promise," he said.
And this tolerance of inefficiencies is partly cultural. "It's partly cultural but I don't think it's -- you should blame culture for that. It is just a way of doing things, holding people accountable," he added.