Indian economy to log 5-5.5 pct growth rate, IMF forecast wrong, says P Chidambaram

Written by PTI | Washington | Updated: Oct 11 2013, 20:52pm hrs
P ChidambaramDefending the FDI policy amid reservations being raised by retail giants like Walmart, P Chidambaram said they always ask for more.
Dismissing IMF's Indian economy's growth forecast of 3.75 per cent as pessimistic, Finance Minister P Chidambaram says country is expected to log 5 to 5.5 per cent rate in the current financial year on back of good monsoon, robust farm output and impact of reforms undertaken by the government in past one year.

"We expect these reform measures to show their impact from the second half of the current fiscal and believe that the Indian economy will grow at over 5 per cent and perhaps closer to 5.5 per cent in 2013-14," he said, in his address to the Carnegie Endowment for International Peace, an eminent US think-tank.

"I know that the World Economic Outlook report (of the IMF) does not share my optimism, but I may tell you that we do not share their pessimism," Chidambaram said highlighting six key fundamentals of the Indian economy including financial system, skilled workforce and strong corporates that have been contributing to the country's growth momentum.

"Set against the current global economic background, even a growth rate of 5 per cent looks good, but is much lower than the ambitious standards that we set for ourselves in 2004," Chidambaram said.

Chidambaram said: "Every year, our financial system is getting better and stronger and, through this, we expect to translate our good investment to GDP ratio into a higher GDP growth rate."

Defending the FDI policy amid reservations being raised by retail giants like Walmart, he said they always ask for more but were expected to work within the policy framework.

"We have a policy. Genuine investor must work within that policy. It may not be the ideal policy from his point of view. But this is the policy that we have today. You have to take it as it is," Chidambaram said.

"I am confident that one or two multi-brand retailers will enter India before the financial year is out. I think, one is just at the door step," he said, without naming anyone.