Mumbai: Finance Minister P Chidambaram on Saturday exuded confidence that the sagging economic growth will soon revive and economy this fiscal will grow by at least one percent more than last fiscal.
The final FY13 GDP numbers are expected early next week and the GDP is widely expected to be around 5 percent. In the first three quarters of the past fiscal, the economy logged in just 5.1 percent growth.
"The economy has slowed down, business has slowed down. (But) this year, I expect the economy to grow at least by 1 percent more than last year," he said, after inaugurating state-run lender Canara Bank's regional office here.
Chidambaram, who took a slew of sentiment-boosting measures since his return to the finance ministry last August, said FY15 growth will be a percentage point higher than the current fiscal and soon touch the potential growth rate of 8 percent.
"Next year, I expect it to grow another 1 per cent more than the current year. We should soon reach our potential growth rate of 8 percent," he said.
The Economic Survey pegged GDP growth between 6.1 and 6.7 percent for FY14. In its annual monetary policy announcement on May 3, the Reserve Bank had estimated growth for the fiscal at 5.7 percent.
Chidambaram, however, stressed that financial sector regulators, supervisors and institutions will have to gear up for the challenges posed for accelerating growth.
"We have to do business in a different way to manage the size. Why are our institutions sometimes found wanting, why are regulators found wanting? Its because they have not built the capacity to manage size and scale," he said.
The Finance Minister specifically named departments of Income Tax and Customs where such instances have been found.
"To deal with exponential growth, as against normal growth, one has to build capacity," he said while asking the management of Canara Bank to invest in human resources and technology.
Chidambaram also asked banks to distinguish between the wilful and business cycle-affected honest defaulters, and specifically asked them not to abandon the latter group.
Drawing from how lower-rung staff at banks has imbibed multi-tasking skills, the Minister said senior level officers should also practise the same. Multi-tasking creates the right team spirit and the customer also goes back happily as he gets the required service, he said.
Earlier in day, the Minister attended the board meeting of the insurance behemoth LIC.