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Economy can be built back to 8 per cent growth rate: Chidambaram

Jul 29, 2013 01:56 PM IST Business Business
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Ahmedabad: Finance Minister P Chidambaram on Monday said the economy can be build back to register the eight per cent growth rate. The remarks came at a time when the economy is growing at around 5 per cent and current account deficit and inflation are the biggest worries of the country. "Last year, we fully financed the current account deficit, we expect that this year as well we will be able to finance it," he said.

He said that the country is on the path of fiscal consolidation but it was not the way it happened globally. "Our fiscal deficit is in trouble but we did not allow it to go unlike what happened globally," he said.

He added that India cannot remain unaffected by the global down turn and stressed that the regulations did not fail in 2008. "Our regulations did not fail. It was the US, UK and European where regulations failed in 2008."

Even as the rupee is falling versus the dollar, the Finance Minister claimed that it was due to speculative attacks. He said the recent depreciation in the value of rupee came in the backdrop of US Federal Reserve Chairman Ben Bernanke statement on quarterly earnings.

On banks lending rate, he said bank rates have been stable and there will be no change in the lending rates and he was also certain that rates will not increase as there is enough money to meet the credit demand. "All credit growth requirements will be met by banks. Banks have communicated that rates will not be increased,' he said.

He said that consumer price inflation has not been contained as there has been no efficient logistics to bring fruits, vegetables etc to the consumers at less price from the farmers. He also said it is wrong to blame farmers if the government hikes the minimum support price. "I know this will not go well with the urban audience but we should remember that we get grains and vegetables because of our farmers. We should salute the farmers. The most hard working are our soldiers and the farmers," he said.

He also appealed to the government to have a liberal open economy as it will be beneficial for all and the way forward. He also said that India have to be made attractive for foreign investment. "We are not yet current account surplus. The day we become current account surplus, we can say no to FDI."

He also asked, "Why do you assume that the next government will be more friendly or that this government is less friendly?" He said the UPA government is friendly and assured that when they will return after the 2014 General Elections, the government will be even more friendly.

While admitting that Gujarat scores over Maharashtra in gross domestic product, he added that the state has a higher infant mortality rate than Maharashtra.

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