“India can achieve 8 per cent growth in next 2-3 years”: P Chidambaram

Sep 23, 2014 Tushita Economy 0

Former Finance Minister P Chidambaram today predicted that if India continues to follow the path of fiscal prudence that has been brought about by the Narendra Modi government, it can achieve 8 per cent growth in the next 2-3 years.

“I remain very confident, despite change in government, that if we remain firmly on the path we will get back to 8 per cent growth in about 2-3 years,” he said at an event in New Delhi.

Under the UPA-II, when Mr. P Chidambaram was the Finance Minister, the Indian economy grew by 4.9 per cent in 2013-14 fiscal. However, in the April-June quarter, the growth picked up to 5.7 per cent.

Mr. Chidambaram holds the view that 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 put the economy back to 8 per cent growth.

Before it was impacted by the global financial crisis of 2008, the Indian economy was growing at over 9 per cent.

“Financial sector reform is also very much required for achieving 8 per cent 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.

Talking further about the issue, Mr. Chidambaram said that it was possible to finance 8 per cent growth by domestic savings and some foreign direct investment.

“Anything more than 8 per cent 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.

Modi Government aims to bring down fiscal deficit from 4.5 per cent in 2013-14 to 4.1 per cent in the current fiscal and hence control it substantially, which according to Mr. Chidambaram is the key to controlling inflation.

He appreciated PM Narendra Modi’s bold decision to abolish the Planning Commission and stated that the body had outlived its utility. “I believe that the right decision was to end the Planning Commission and what should be in place is only a much smaller, not more than 100 people in the new body,” said the Former Finance Minister. But he also added that only those people should be inducted who can do prospective planning, and lay out the future roadmap and finally leave it to the Ministry.

P Chidambaram has served as the Finance Minister of the country multiple times in addition to serving as the Home Minister also during the period of UPA-II government’s regime. According to him, 8 per cent growth would help create employment for 10 million people.

Chidambaram, Chidambaram GDP growth, Current Account Deficit, Finance minister, Fiscal Deficit, Indian Economy, P Chidambaram

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Tushita

Tushita is a political writer at thenational.net. Her deep rooted interest in politics, passion for writing and craze for travelling define her. Writing since her school days, she aspires to write lifelong and make the world a happier place to live with the power of her pen.