New Delhi: Union Finance Minister P Chidambaram on Friday said that Indian economy is most likely to grow by 6.5 percent in financial year 2013-14.
The Finance Minister stressed upon the Economic Survey 2012-13, that was tabled in Parliament on Wednesday, which projected 6.1 percent to 6.7 percent GDP growth in 2013-14, as the downturn is more or less over and the economy is looking up.
Speaking to a TV news channel, Chidambaram said that his personal expectations on the economy see both GDP growth and Inflation at 6.5 percent, while replying to a question what would the government do if the Budget arithmetic goes wrong.
The Economic Survey 2012-13 predicts that the global economy is likely to recover in 2013 and various government measures will help in improving the Indian economy’s outlook for 2013-14.
The Finance Minister remained hopeful that India will not suffer a rating downgrade. “I respect the rating agencies and their outlook towards India. But to say that it will suffer a downgrade is putting it wrong. Owing to the global economic pressure, India is still holding on its own and is faring better than other economies.”
“The European Union is contracting, Germany is contracting, France is too and Japan is stagnant,” he stressed.
On the question of retrospective taxation, Chidambaram was of the opinion that retro tax is providing hindrance to investment flows but disagreed that MNCs feel they are soft targets in India.
“On the contrary, UK Business Secretary George Osborne said that the UK is more of a soft target; Japan is a soft target and so is Korea. A developing country, like India, needs to protect it tax base and tax revenue.
On the Vodafone tax issue, Chidambaram categorically stated that the government will provide conciliation. “We want the matter resolved; we’ve asked them if they want it resolved, suggest a way forward. Clarity will only come into play post-Vodafone case settlement.”
“It takes two hands to clap. If Vodafone is looking for a resolution, there can be one,” Chidambaram said.
Chidambaram also defended investments made by foreign investors and stated that the money is coming to the country under FDI and FII.