India registered growth despite eurozone crisis: Chidambaram
Bangalore: Prime Minister Manmohan Singh is contemplating a number of measures to contain fiscal deficit and the government will get the economy back to high growth trajectory, Home Minister P Chidambaram said on Tuesday.
"I think the Prime Minister-cum Finance Minister is contemplating a number of measures to tighten revenue collection and to control wasteful expenditure. We have already imposed across-the-board cut on non-plan expenditure. That will help," he told reporters here.
Identifying savings, investment, fiscal deficit and current account deficit as four fundamental issues that need to be tackled, he said the measures being taken by the government would improve savings and investment. "We will get back to the high growth rate," he said.
On the current account deficit, he said it depends on the international commodity prices and rupee exchange rate as the country imports many commodities it needs.
"Once confidence builds, the exchange rate will stabilise. And we must produce more in the country and depend less on imports ... The current account deficit will come down over a period of time. So, if we can tackle the four issues -- savings, investments, current account deficit and fiscal deficit -- you will see we get back to the high growth path."
The Indian economy is facing slowdown. The economic growth hit a nine-year low of 6.5 percent in 2011-12. Fiscal deficit is seen rising to Rs 5.13 lakh crore or 5.1 percent of the GDP in the current financial year.
Also, current account deficit (CAD) widened to the highest ever level to 4.5 percent of GDP at USD 21.7 billion in January-March period of 2011-12.
Chidambaram said he hopes the euro zone, a major export market for Indian goods and services, would recover quickly.
"Our major markets are the US, eurozone and China. Latin America and Africa are smaller markets for us. If these markets recover and do well which means bonafide goods and services will go to those market. If all countries grow, it is good for India," he said.
He also said the country should produce more and depend less on imports. "We can produce more oil, iron ore and coal in the country and to that extent we can reduce dependence on imports," he added.
Chidambaram said overseas investment is good for the country. "If Indian business and industry can acquire assets and companies abroad and reach new markets by acquisition, it is a good thing to happen," he said.
For instance, China is acquiring massively overseas. "Only last month Chinese government has promised USD 50 billion (investment) in Latin American countries by Chinese companies," Chidambaram said.
India should acquire iron ore, coal mines and gas fields abroad which was not wrong, he added.