PRESS TRUST OF INDIA
Mumbai, Nov 15
With the green shoots of recovery visible, finance minister P Chidambaram today exuded confidence that the economy will pick up in the second half and record a growth of 5-5.5 per cent in financial year 2013-14.
He, however, sounded a note of caution for investigative authorities, saying all commercial decisions should not be seen as “motivated or malicious.”
“I am confident that the green shoots that are visible here and there will multiply and that the economy will revive. There will be an upturn in the second half of this year,” Mr Chidambaram said in an address to bankers at Bancon 2013.
“It’s quite possible that the estimates made by the Reserve Bank of India or the Prime Minister’s Economic Advisory Council or the government about growth being between 5 and 5.5 per cent will be realised,” he said.
GDP growth fell to a decade’s low of 5 per cent in fiscal 2012-13 as investments slowed and factory output decelerated. In the April-June quarter of this fiscal, the growth rate was 4.4 per cent.
Mr Chidambaram said the government will be able to contain the fiscal deficit at 4.8 per cent of the GDP and narrow the current account deficit (CAD) to less than $56 billion, though inflation continues to be worrisome.
He asked the bankers to deal firmly with wilful defaulters and support those who are reeling under the impact of the economic slowdown.
“As far as the government is concerned, I assure you as long as you take decisions based on facts and circumstances available to you at that time and do it at an appropriate level and an appropriate committee or an appropriate forum and exercise your best judgement, we will defend you and stand by you”, he said.
India’s exports grew 13.4 per cent in October, the fastest pace in two years. The eight core sector industries expanded by 8 per cent in September, the highest rate in 11 months. This pulled up the Index of Industrial Production for the month to 2 per cent compared with 0.43 per cent in August.
The finance minister said it was a pity that a country of India’s size could not achieve its potential growth rate of over 8 per cent.
“Given that savings are above 30 per cent of the GDP and given the normal incremental capital-output ratio…the measures that we have taken will yield results and we will get back to the high-growth path. Movement towards the high-growth path will be visible in 2014,” the finance minister said.
He said inflation is “the most difficult challenge.” “We were able to contain WPI inflation for most part of this year until the recent spurt…We haven’t been able to contain CPI-based inflation, mainly because it is driven by food items, especially fruits, vegetables, eggs, meat and other items,” he said.
While WPI-based inflation rose to an eight-month high of 7 per cent in October, retail inflation was at a seven-month high of 10.09 per cent. The minister reiterated that the fiscal deficit target for the current financial year will be met.
In financial year 2012-13, the fiscal deficit was 4.9 per cent of the gross domestic product.
Tata compared with Sachin
Mumbai, 15 November: Praising industrialist Ratan Tata, finance minister P Chidambaram today described him as Sachin Tendulkar of corporate India.
Mr Chidambaram was speaking after honouring the chairman emeritus of Tata Group with the first CII President’s award for his contributions to industry and society.
The finance minister said: “Ratan (Tata) is as big a draw as Sachin.”
Mr Tata said he was humbled by the honour and recalled how late Prime Minister Rajiv Gandhi had appreciated the role of the CII in transforming the country. pti