FM confident of 5-5.5 pc growth in FY'14

Top Stories

»	49% Indian startups now from tier 2, 3 cities: Jitendra Singh
»	'India ranks 3rd in global startup ecosystem & number of unicorns'
»	Tripura exported over 9K tonnes of pineapples in 2 years
»	CPI inflation eases to 6.71% in July, IIP falls to 12.3%
»	Rupee depreciates 12 paise to close at 79.64 against US dollar

SME Times News Bureau | 16 Nov, 2013
Finance Minister P Chidambaram is confident of achieving 5 to 5.5 percent growth in the current fiscal, reports media.

"The green shoots are visible and measures taken by the government will help the economy achieve the potential growth rate of 8 percent," Chidambaram said Friday.

Addressing bankers and economists at Bancon 2013, a flagship event of the Indian Banks' Association, Chidambaram told the lenders to deal firmly with willful defaulters, but handhold those who are reeling under the impact of the economic slowdown.

The Minister asked the bankers not to desist from taking decisions and promised to defend them in case of bonafide decisions going wrong.

Inflation, especially the food prices, he added, has continued to remain a challenge for the government.

Referring to the state of economy, Chidambaram said, "the green shoots that are visible here and there, will multiply and the economy will revive.

There will be an upturn in the second half of this year and it is quite possible that the estimates made by the Reserve Bank or the PMEAC or the government of growth between 5-5.5 percent will be realised."

The economic growth rate slipped to decade's low of 5 percent in 2012-13 and during the first quarter of current fiscal it stood at 4.4 percent. The growth figures for the second quarter are scheduled to be announced on 29th November.

Asking the banks to help the industry in difficulty, Chidambaram said, "while we should be stern to wilful defaulters, we must hold the hand of those who are victims by external circumstances. "This is the period for bankers and customers to work together to keep faith in each other because when we come out of the trough... when upturn begins and when we see growth quarter after quarter that (would be the) time when most banks would be healthy, balance sheets would become healthy."

Regretting that often the decisions were questioned by authorities, the Minister asked the bankers not to desist from taking decisions based on facts and circumstances at a given time.

"As far as government is concerned, I assure you as long as you take decision based on facts and circumstances available to you at that time and do it at an appropriate level and an appropriate committee or an appropriate forum and exercise your best judgement we will defend you ,"he said.

The Minister stressed that "no business can survive and person can take a decision if every decision is questioned as motivated or malicious....I think that would be most dangerous decisions that authorities can take and I would strongly advise that is not the approach to adopt."

A decision could turn out to be a poor decision or even wrong decision, but that does not mean that it was a dishonest or a malicious decision, he added.

Referring to growth, Chidambaram said that it was a pity for a country of India's size not to achieve its potential growth rate of over 8 percent.

"Given that savings are above 30 percent of GDP, and given the normal incremental capital-output ratio ...the measures that we have taken will yield results and we will get back to the high growth path. Movement towards the high growth path will be visible in 2014," he added.

As regards the price situation, Chidambaram said managing inflation was "the most difficult challenge".

He said that Wholesale Price Index (WPI) inflation, which was 1.9 percent in 2009, has risen to 7 percent.

The retail inflation measured by the Consumer Price Index (CPI) was above 10 percent, while the food inflation over 12 percent.

"We were able to contain WPI inflation for most part of this year, until the recent spurt...We have not been able to contain CPI based inflation mainly because it is driven by food items especially fruits, vegetables, eggs, meat and other items", he said.