8% GDP growth possible in next 2-3 years: P Chidambaram

Former Finance Minister P Chidambaram today said India can achieve 8% growth in the next 2-3 years by following the path of fiscal prudence. "I remain very confident despite change in government, that if we remain firmly on the path we will get back to 8% growth in about 2-3 years," he said at an event here. The Indian economy grew by 4.9% in 2013-14 fiscal. However, in the April-June quarter, the growth picked up to 5.7%.

Chidambaram said if the government continues to remain on the path of fiscal prudence, promotes savings and investments, and be more diligent in implementing projects, it would be possible to get back to 8% growth. Indian economy was growing at over 9% before it was impacted by the global financial crisis of 2008. "Financial sector reform is also very much required for achieving 8% growth. FSLRC (Financial Sector Legislative Reforms Commission) has made far reaching recommendations, some are legislative, some are non-legislative in nature. Non-legislative recommendation should be carried out over a period of next 2-3 years," he said.

Chidambaram said it is possible to finance 8% growth by domestic savings and some foreign direct investment. "Anything more than 8% is bound to become inflationary which will exacerbate fiscal deficit. We have to borrow more and there are consequences of borrowing more and enlarging the fiscal deficit and current account deficit," he added.