Revival of interest by investors to push growth: Chidambaram
Hong Kong: Bolstered by "revival of interest" by investors in India, Finance Minister P Chidambaram on Tuesday expressed hope that the country's economy will expand by 6-7 percent next fiscal, starting April.
"Current (fiscal) year, we will not do better than 5.7 percent. Next year, we hope to have a growth of 6-7 percent," he said, adding that with the revival in investment activities, India would be able to achieve its potential growth rate of over 8 percent.
Elaborating on the reason for optimism, Chidambaram said there is a revival of investor interest in India as a result of a number of measures taken by the government.
"People are coming to us for inquiries, approaching banks. There is a clear revival. I am not saying there is investment taking place, but there is a revival of interest," he said.
Chidambaram, who is here for investors' conference, further said India has the potential to grow over 8 percent.
"If investment gathers pace year after, we should get back to our growth rate of 8 percent. India's potential growth rate is above 8 percent. We have done in it before. We will do it again," he said.
The global slowdown has taken its toll on India's growth, and its GDP fell to 5.4 percent in the first half of the current fiscal. It may end the year with a decade low growth of 5.7 percent.
India had posted growth rate of over 9 percent for three years in a row before the global crisis of 2008.
The government has taken slew of reform measures, like further liberalisation of FDI norms in sectors including retail and aviation, setting up a Cabinet panel to fast track projects, and reducing subsidy on petroleum products.
Besides, the government has also repeatedly stressed that it's widening fiscal deficit, a major concern of rating agencies, will be contained at 5.3 percent of GDP this fiscal and go down further in the coming years.
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