Business Daily from THE HINDU group of publications
Sunday, Mar 08, 2009
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Business Daily from THE HINDU group of publications Sunday, Mar 08, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Industry & Economy
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Economy Web Extras - Outlook Chidambaram forecasts return to high growth path by 2010 Our Bureau Mumbai, March 7 The Home Minister, Mr P. Chidambaram, said the Indian economy would start recovering from the third quarter of the coming fiscal and end the year with 7 per cent growth. He also said by FY10-11 the growth rate could go back to 9 per cent. “I am saying this with a high degree of confidence that 2010 will see us return to the high growth path,” said Mr Chidambaram, speaking at a conference organised by the International Bar Association. Up savings, investmentsIn order to achieve this growth rate, the Home Minister said, we should follow a few steps. “We have to emphasis more on savings and also step up investments. In the next two to three years, we will see an increase in public investments and a decline in private investments. The Government will recapitalise banks and infuse more capital into public sector infrastructure, irrigation, agriculture, power generation, etc,” he said. The country has to be more “prudent” about its “inessential” expenditure, he said. “If we are severely prudent then we can curb run away expenditures and deficits.” Consumption should be encouraged as “domestic consumption is what has kept us reliant. Huge domestic demand is a magnet for foreign investment”. Increasing exports should also be an important goal as it helps us earn forex, he said.
“It is important for us to maintain a high growth rate in order to reduce poverty. And we should try to maintain this 9 per cent growth rate for another 20 to 25 years,” said Mr Chidambaram. He also added that in order to achieve a 7 per cent growth rate for this fiscal we should post a rate of growth of at least 7.6 per cent in the fourth quarter of this fiscal. “But this looks like a stiff target,” he said. He concluded by saying that “unless the developed world puts together a well-regulated financial system and revives its financial institutions, the shadow of the failure of the financial system in the western world will fall upon all developing countries, including India.” Earlier, addressing the conference, Mr C.B. Bhave, Chairman of SEBI, said there is a need to examine the demerits of securitisation of loans by lenders. In the case of securitisation, since the original lender passes on the risk to subsequent investors, he will not be available to address the genuine difficulties of borrowers, he said. Responding to a question on debt market, he said going by the response received by a recent debt issue, it appears that at the moment investors prefer debt products compared to other instruments. More Stories on : Economy | Small Savings | Outlook
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