NEW DELHI: Enthused by the higher gross domestic product (GDP) growth of 8.4 per cent in 2005-06, announced officially earlier in the day on Wednesday, the Finance Minister, P. Chidambaram, said further legal, administrative and structural reforms would be necessary in sectors such as mining and electricity, in particular, to sustain the higher growth rate.

In an interaction with newspersons here, Mr. Chidambaram disclosed that he would be meeting the Prime Minister, Manmohan Singh, along with the Ministers concerned, to discuss the problems and the dismal performance of mining and electricity. If only these two sectors had performed better, the country would have achieved a GDP growth of 8.5 per cent during the year, he said.

Holding back a higher growth rate during 2005-06 was primarily the mining sector which witnessed a growth of a mere 0.9 per cent as compared to 5.8 per cent in 2004-05.

Expressing satisfaction, however, over the overall growth achieved during the fiscal, Mr. Chidambaram emphasised that the hurdles in the way of luring larger foreign direct investment (FDI) should be removed.

"My information is that [a] lot of foreign capital is moving [in]to India and that includes foreign institutional investors....We will continue to attract FIIs. Also, we need to attract FDI, which is not a substitute for FIIs, but in addition to FIIs. Temporary net sales by FIIs does not mean that there is outflow of foreign capital," he said.

He did not expect the rising oil prices to have any impact on the growth momentum. "If global oil prices are reflected in domestic prices, it will impact inflation, but there is no reason why it should affect the growth rate as long as the productive sectors absorb increasing costs and still sell goods," he said.

A welcome rebound in the farm sector coupled with robust performances by the manufacturing and services sectors spurred the Indian economy to post a GDP (gross domestic product) growth of 8.4 per cent in 2005-06, soaring much beyond the earlier growth estimate of 8.1 per cent for the fiscal and nearly one percentage point higher than the 7.5 per cent achieved in 2004-05.

Aiding the higher GDP growth, according to the latest data released by the Central Statistical Organisation (CSO) here, was the agriculture sector which bounced back with a growth of 3.9 per cent during the fiscal from a mere 0.7 per cent in 2004-05 and within striking distance of the government's target of four per cent.

In particular, it was during the fourth quarter of 2005-06 that the farm sector witnessed a healthy growth of 5.5 per cent as against a dismal 1.5 per cent in the same quarter during the previous fiscal.

This, in fact, was one of the major reasons for the fourth quarter growth soaring to 9.3 per cent last fiscal as compared to 8.6 per cent in the same quarter of 2004-05.

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