Chidambaram expects 9 per cent growth in FY '08

MUMBAI: Finance Minister P Chidambaram on Monday said India would register a growth rate of 9 per cent this fiscal, falling short of the rate it achieved last year due to turbulence in the world markets.
    
"We may not do 9.4 per cent this year due to turbulence in the world markets. But it will be close to 9 per cent," he said while speaking about the GDP growth rate.
    
Some states will be growing even at 12 per cent, but a few states would grow at five per cent, he said.
    
Chidambaram said the country's GDP under UPA government has grown at 7.5 per cent in the first year, nine per cent in the second year and 9.4 per cent in the third year.
    
He said "if we keep on growing at nine per cent, the per capita income will double every nine years and by 2025, it will make ours a middle income country".
    
The minister said the growth rate achieved by the UPA government over the last three and a half years was much higher than what the previous NDA government managed.
    
Speaking at an interactive meeting with trade and industry here, Chidamabaram said though the NDA government took a number of initiatives, it managed an average growth of only 5.8 per cent in its six-year stay in the government.
    
The meeting was organised by the local Congress unit.
    
He attributed the slower growth rate during the NDA regime to "uncertainty about policy direction and mismanagement".
    
Giving reasons for the higher growth achieved, he said the government adopted a simple rule of stepping up investment, which in turn stimulated growth. "Every new job creates income which in turn leads to increase in savings, collection of higher taxes by the government.
    
"Spending stimulates economy. It is a virtuous cycle. We have to make sure it is never broken," he said.
    
Chidambaram, however, conceded that there are slippages in the system. "I concede there is leakage. We have stepped up investment even if pipe is leaking," he said.
    
The finance minister said he is bullish about India. All Indians living outside the country are bullish. All non-Indians are also bullish, he said indicating it is only the local Indians who are apprehensive about the India story.
    
"No one is talking about small plants. We are going for large sized refineries, ports and special economic zones. We are proud that the industry is thinking big and becoming competitive", the minister noted.
    
"There is a huge investment in the pipeline running into thousands of crores of rupees. We want to make sure no sector lags behind in investment," he observed.
    
"India's aspiration is to move up the economic ladder and become a super power," he said.
    
The minister, however, said a large section of people are poor. There are lot of forgotten communities that have been ignored by the system. Poor people are being pushed out of the inner city. But India is the only successful country in South East Asia, he said.