Chidambaram predicts a higher growth rate

India’s growth rate will bounce back in a year after experiencing the adverse economic situation, said Union Finance Minister P Chidambaram on Tuesday during his address to Indian industrialists and business persons at World Economic Forum's 24th India Economic Summit in New Delhi.

Speaking at the summit the minister said, “India will return a very satisfactory growth rate this year, and we will bounce back next year. I want the Indian business community to know that the prime minister and his team are on the job 24/7… the government is focusing on boosting liquidity, ensuring an appropriate price of capital and making credit more available to industry and consumers.”

He said that the government’s policy is in favour of stimulating growth against inflation and reassured that the Government is being extremely vigilant and will take all necessary steps in a proactive way.

Predicting a better growth in agricultural sector, Chidambaram said, ‘agriculture which covers two-thirds of India’s workforce, is still growing at a robust pace. We will have a very substantial bumper crop.’

Urging India Inc to exhibit confidence and courage while dealing with the ongoing slowdown in the economy, he said: ‘There are enough people to spread doom and gloom. Don’t join that bandwagon. Keep your chin up.’

The government, Reserve Bank of India (RBI) and several governing bodies had estimated that like last four years, India would continue to grow with above 9% growth rate but after global economic crisis, the growth rate has been revised and estimated between 7 and 7.5% this year.

He also asked the India Inc. to cut down the prices of products, not the production as the rumours in the market roaming. The only way Indian economy can maintain its growth is by stimulating consumer demand to enjoy hard-won market share, said Chidamabaram.

For supporting the Indian industries, the government has slashed the excise duty in several products while also ensured to examine further chopping up, if necessary. Again, for ensuring liquidity in the system the UPA government and the apex bank had taken several measures including revising Cash Reserve Ratio (CRR), Prime Lending Rate (PLR), Repo Rate, and short-term interest rate.

But, Indian Business leaders who were already facing the impact of global economic crunch and heavy slow down in selling, seemed uneasy on Finance Minister’s statement of chopping up the price of products. As several entrepreneurs had indicated that despite slashing the prices of the products, the selling rates were not increased.