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Chidambaram exudes optimism on growth

Special Correspondent

NEW DELHI: Enthused by the revision of the gross domestic product (GDP) growth figure from 9.4 to 9.6 per cent in 2006-07, the highest in 18 years, a confident Finance Minister P. Chidambaram on Thursday pitched for a near 9 per cent expansion of the economy during the current fiscal, while reserving the government’s right to make rapid adjustments in tune with the evolving global situation.

The revised data on GDP growth and quick estimates of national income released by the Central Statistical Organisation (CSO) for the previous fiscal showed that while the growth rate of per capita income stood at 8.1 per cent, the overall growth in 2005-06 was fixed from nine to 9.4 per cent.

At a press conference here, exuding optimism over the robust performance of the economy in the last fiscal, in the wake of fears of a global slowdown now, Mr. Chidambaram said: “We are maintaining a balance between inflation, which is still below four per cent, and growth, which is well above eight per cent. My goal is to maintain growth, but at the same time, the government reserves the right to make rapid adjustments depending upon the evolving international situation.”

Asked whether the adjustments would be monetary or fiscal, he said: “We are not taking administrative steps in a vacuum. We are doing so in heightened uncertainties, and we are making rapid adjustments. I am confident that if we keep firm hands on the wheel, [the] economy will sail through the turbulent waters.”

Asserting that the GDP growth this fiscal would be close to 9 per cent and the government would strive for a higher growth in 2008-09, Mr. Chidambaram said the economy was “growing at 9.4 per cent in 2005-06; 9.4 per cent, which has been revised to 9.6 per cent in 2006-07, and is estimated to grow close to nine per cent in 2007-08.”

His objective was to continue to maintain growth at the same level.

The interesting data in the CSO figures, the Finance Minister said, pertained to the spurt in capital formation in 2004-05. According to the revised figures, the jump in capital formation and domestic savings was to the extent of four per cent.

While domestic savings rose, foreign direct investment played a crucial role.

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